This Article is From Dec 09, 2018

Non-Maintenance Of Minimum Balance: Penalty Charges Levied By Top Banks

Most of the leading banks have fixed their AMB according to the location of a customer's account in urban, metro, semi-urban and rural areas.

Non-Maintenance Of Minimum Balance: Penalty Charges Levied By Top Banks

AMB is the minimum average of deposits required by customers in their savings bank accounts.

Banks have mandated regular saving bank account users to maintain a certain average monthly balance (AMB) in their accounts, failing which they have to bear certain penalty charges. Average Monthly Balance (AMB) is the minimum average of deposits required by the customers in their savings bank accounts. Most of the leading banks of the nation such as State Bank of India (SBI), HDFC Bank, ICICI Bank, Punjab National Bank (PNB) and Axis Bank have fixed their AMB according to the location of a customer's account in urban, metro, semi-urban and rural areas and charge customers for non-maintenance of these minimum average balance (MAB) in their savings accounts. (Also read: Transaction Charges On ATM-Cum-Debit Cards Levied By Top Banks)

Given below are the AMB requirement and penalty charges levied for non-maintenance of AMB by select commercial banks :

State Bank of India (SBI)

SBI, country's largest lender, requires customers with accounts in metro and urban branches to maintain a minimum average balance of Rs 3,000 every month. Customers with accounts in semi-urban branches and rural branches are required to maintain an MAB of Rs 2,000 and Rs 1,000 respectively, according to the bank's website - sbi.co.in.

Customers failing to meet the MAB requirements have to bear the following penalty charges:

Metro and urban branch (required MAB Rs 3,000)Charges
Shortfall <= 50%Rs. 10 + GST
Shortfall > 50-75%Rs. 12 + GST
Shortfall > 75%Rs. 15 + GST
Semi-urban branch (required MAB Rs 2,000) 
Shortfall <= 50%Rs 7.50 + GST
Shortfall > 50-75%Rs 10 + GST
Shortfall > 75%Rs.12 + GST
Rural (required MAB Rs 1,000) 
Shortfall <= 50%Rs 5 + GST
Shortfall > 50-75%Rs. 7.50 + GST
Shortfall > 75%Rs 10 + GST

(As mentioned on SBI's official website)

HDFC Bank

HDFC Bank requires customers with accounts in metro and urban branches to maintain a monthly average balance of Rs 10,000. The monthly average required in semi-urban and rural locations is Rs. 5,000 and Rs 2,500 respectively, according to the bank's website - hdfcbank.com

Customers failing to meet the MAB requirements have to bear the following penalty charges:

Description of ChargesRegular Savings Account
Minimum Average Balance RequirementsMetro / Urban branches: AMB Rs.10,000/-,
Semi-Urban Branches: AMB Rs.5,000/- ,
Rural Branches: AQB Rs.2,500/- or Fixed Deposit of Rs. 10,000 for minimum 1 year 1 day period
Charges applicable on non-maintenanceBalance Non-Maintenance Charges*
AMB Slabs Metro & UrbanSemi Urban
(in Rs.)AMB Requirement -Rs 10,000/-AMB Requirement –Rs. 5,000/-
>=7,500 to < 10,000Rs. 150/-NA
>=5,000 to < 7,500Rs. 300/-NA
>=2,500 to < 5,000Rs. 450/-Rs. 150/-
0 to < 2,500Rs. 600/-Rs. 300/-
* plus taxes as applicable 
AMB – Average Monthly Balance
 
AQB Slabs (in Rs.)Balance Non-Maintenance Charges* (per quarter) - Rural Branches
>= 1000 < 2,500Rs. 270/-
0 - <1000Rs. 450/-
*plus taxes as applicable 
AQB – Average Quarterly Balance

(As mentioned on HDFC Bank's official website)

ICICI Bank

ICICI Bank requires customers with accounts in metro and urban branches to maintain a MAB of Rs 10,000. The monthly average required in semi-urban and rural locations is Rs 5,000 and Rs 2,000 respectively, according to the bank's website - icicibank.com.

Customers failing to meet the MAB requirements have to bear the following penalty charges:

Minimum monthly average balance (MAB)*Metro and Urban locations - Rs.10,000
Semi-urban locations - Rs.5,000
Rural locations - Rs 2,000
Gramin locations - Rs.1,000
Charges for non maintenance of minimum monthly average balance (NMMAB)Metro/Urban/Semi-Urban/Rural locations :
Rs. 100 + 5% of the shortfall in required MAB
Gramin locations : 5% of the shortfall in required MAB

(As mentioned on ICICI Bank's official website)

Punjab National Bank (PNB):

PNB requires customers with accounts in metro and urban branches to maintain a MAB of Rs 2,000. The monthly average required in semi-urban and rural locations is Rs 2,000 and Rs 1,000 respectively, according to the bank's website - pnbindia.in.

Customers failing to meet the MAB requirements have to bear the following penalty charges:

Minimum quarterly average balance (QAB) and charges for not maintaining of QAB
Area Of BranchMinimum Quarterly Average BalanceIncidental Charges
RuralRs 1000From Rs. 25 to 250 as per location, category and deficit in QAB as per brackets in Rs 100s
Semi- UrbanRs 2000
UrbanRs 2000
MetropolitanRs 2000

(As mentioned on PNBs official website)

Axis Bank:

Axis Bank requires customers to maintain a MAB of Rs 10,000, according to the bank's website - axisbank.com

Customers failing to meet the MAB requirements have to bear the following penalty charges:

Monthly Average BalanceRs 10,000
If Monthly Average Balance is not maintainedRs. 10 per Rs.100 of the shortfall from Average Monthly Balance Requirement or Rs 500, (plus GST) whichever is lower with a minimum charge of Rs 100

However, there are certain accounts where AMB rules are not applicable. These accounts are called as zero balance savings accounts.