Punjab National Bank: After Canara Bank, now Punjab National Bank has given relief to its customers by removing the rule of maintaining minimum average balance in the account.
Punjab National Bank: Punjab National Bank (PNB) has given a big relief to its account holders. The bank has announced that now no penalty will be charged for not maintaining minimum average balance in the savings account. This decision of the bank will give relief to the people from the worry of keeping minimum balance in the account.
The bank says that the purpose of this step is to promote financial inclusion and make banking more accessible to all. This new rule of the bank has come into effect from July 1, 2025. This will especially help women, farmers and low-income families. Last month, Canara Bank also removed the need to maintain average monthly balance (AMB) on all its accounts from the month of June.
Why do banks impose minimum balance rule?
Banks ask to maintain minimum average balance in their accounts so that they can meet their operational expenses and can bear the cost of various services like online banking, ATM, branch etc. Many times, banks also provide facilities like higher interest rate, free ATM transactions etc. to the customers on maintaining minimum balance.
At the same time, banks charge penalty from their customers for not maintaining minimum balance. Many times, banks even close the account if minimum average balance is not maintained in the account for a long time. Broadly speaking, banks are a business, which depends on deposits and penalty to meet their expenses.
According to RBI’s rule regarding minimum balance, banks should always keep in mind that the balance should not go into negative due to penalty on not maintaining minimum balance in the account.
Banks also earn from these things
However, sometimes banks remove this rule so that people living in remote rural areas and low-income people can easily use banking services without any penalty. Due to this, the operational cost of the bank is covered by many other things such as SMS alert fees, service fees, transaction fees, interest etc.
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