Category: Indian Banking | Financial News | Financial Inclusion
Date: June 2025
🏦 Major Banking Update: Canara Bank Waives AMB Requirement
In a significant move to simplify banking and encourage financial inclusion, Canara Bank has officially removed the Minimum Balance Requirement (also known as Average Monthly Balance – AMB) across all its Savings Bank (SB) accounts. This means that from June 1, 2025, customers no longer need to worry about maintaining a specific monthly balance to avoid penalties.
This decision is expected to benefit millions of account holders across the country and reflects Canara Bank’s commitment to inclusive banking and customer-friendly reforms. For more financial and economic updates, visit IndianCurrentAffairs.com.
📌 What Does the Change Mean for Customers?
Earlier, Canara Bank, like most traditional public-sector banks, required customers to maintain a minimum balance ranging from ₹500 to ₹10,000 depending on the type of savings account and location (rural, semi-urban, urban, or metro). Failure to maintain this balance typically attracted penalties.
With this new policy:
- No penalty will be levied for non-maintenance of minimum balance.
- Applicable to all savings account variants including general savings, salary accounts, and NRI accounts.
- Effective across all branches irrespective of location.
🔍 Why Has Canara Bank Made This Decision?
1. Enhancing Financial Inclusion
One of the core objectives of this move is to bring more unbanked and underbanked individuals into the formal banking system. By eliminating the balance requirement, Canara Bank makes it easier for people from economically weaker sections to maintain and use bank accounts without financial pressure.
2. Competing in a Digital Economy
With fintech companies and private banks aggressively promoting zero-balance accounts through mobile apps and neobanking platforms, Canara Bank’s decision positions it competitively in the digital banking space.
3. Customer-Centric Strategy
Today’s banking customers demand flexibility and simplicity. Removing the minimum balance requirement is a clear indicator that Canara Bank is focusing on improving the customer experience and retaining existing users while attracting new ones.
💡 Benefits of Zero Minimum Balance Policy
Here are some key advantages for account holders under this new rule:
- Financial Flexibility: Customers can now operate their accounts freely without the stress of maintaining a threshold balance.
- Encouragement for Digital Transactions: Zero balance accounts encourage more people to use digital banking, UPI, and debit card services.
- Better Savings Habits: Customers are more likely to use savings accounts regularly when they are not penalized for low balances.
- Support for Students and Low-Income Groups: This policy is especially beneficial for students, pensioners, daily wage workers, and others who typically keep lower balances.
📈 How This Affects India’s Banking Landscape
Canara Bank’s move is a step in line with the Government of India’s Digital India and Financial Inclusion missions. It helps:
- Increase access to banking in rural and semi-urban regions.
- Reduce the reliance on cash-based transactions.
- Promote the use of formal banking systems among economically vulnerable populations.
Other public-sector banks may follow suit in the near future to stay competitive and customer-friendly.
🧾 Account Types Affected
The following savings account categories are now zero-balance accounts:
- General Savings Bank Accounts
- Canara SB Premium, SB Select, and SB Privilege Accounts
- Salary Accounts
- NRI Savings Accounts
- Student and Minor Accounts
📰 Stay Updated
For daily updates on Indian banking reforms, financial news, and exam-relevant current affairs, visit IndianCurrentAffairs.com — your reliable source for verified and curated news tailored for aspirants and aware citizens.