Banks require their customers to maintain a certain monthly or quarterly average of deposit in their savings bank accounts. Failing to comply with the monthly average balance or MAB rules – or minimum balance rules – set by the banks attracts penalty charges applicable to the customer. Savings account holders are required to maintain a monthly average balance – which is the average of daily closing balances in a bank account – to the tune of Rs. 1,000-10,000 in PSU lender State Bank of India, and its private sector peers HDFC Bank and ICICI Bank.
Failing to comply with the required minimum balance rules attracts penalty charges in the range of Rs. 5-600. The minimum balance requirement as well as the penalty charges vary depending on the location of bank branch and degree of shortfall in account balance.
Here’s a comparison of the minimum average balance requirements applicable to savings bank accounts in SBI, HDFC Bank and ICICI Bank:
SBI
Individuals holding regular savings bank accounts in SBI branches located in metro and urban areas are required to maintain a monthly average balance of Rs. 3,000, according to the bank’s website – sbi.co.in. Those holding SBI savings accounts in semi-urban and rural branches are required to maintain a minimum average balance of Rs. 2,000 and Rs. 1,000, respectively.
Branch type Average monthly balance
Metro Rs. 3,000
Urban Rs. 3,000
Semi-urban Rs. 2,000
Rural Rs. 1,000
HDFC Bank
Those holding a regular savings account in HDFC Bank branches located in metro and urban areas are required to maintain an average monthly balance of Rs. 10,000, according to the bank’s website – hdfcbank.com. In semi-urban branches, the regular savings account holders are required to maintain an average balance of Rs. 5,000 every month. In rural branches, the customers are required to either maintain an average quarterly balance (AQB) of Rs. 2,500 or set up a fixed deposit of Rs. 10,000 for a maturity period of a minimum one year and one day, according to the bank.
Branch type Average monthly balance
Metro Rs. 10,000
Urban Rs. 10,000
Semi-urban Rs. 5,000
Rural Rs. 2,000
ICICI Bank
Individuals holding a regular savings account in ICICI Bank branches located in metro and urban areas need to maintain an average monthly balance of Rs. 10,000, according to the bank’s website – icicibank.com. The average monthly balance required in semi-urban and rural locations is Rs. 5,000 and Rs. 2,000 respectively.
Branch type Average monthly balance
Metro Rs. 10,000
Urban Rs. 10,000
Semi-urban Rs. 5,000
Rural Rs. 2,000
Penalty charges for non-compliance with minimum average balance (MAB) rules
SBI
SBI charges a fee ranging from Rs. 5 to Rs. 15 (plus applicable GST) for non-maintenance of the required monthly average balance. The charges vary depending upon the branch location and degree of shortfall.
Shortfall from required average monthly balance Penalty for non-maintenance of average monthly balance (excluding GST)
Metro Urban Semi-urban Rural
Up to 50% Rs. 10 Rs. 10 Rs. 7.5 Rs. 5
More than 50% but less than 75% Rs. 12 Rs. 12 Rs. 10 Rs. 7.5
More than 75% Rs. 15 Rs. 15 Rs. 12 Rs. 10
HDFC Bank
HDFC Bank charges a penalty fee in the range of Rs. 150-600 for failing to maintain the required average of balance in a regular savings account.
Shortfall (Rs.) Penalty for non-maintenance of AMB/AQB (excluding taxes)
Metro Urban Semi-urban Rural
=7,500 to < 10,000 Rs. 150 Rs. 150
=5,000 to < 7,500 Rs. 300 Rs. 300
=2,500 to < 5,000 Rs. 450 Rs. 450 Rs. 150
0 to < 2,500 Rs. 600 Rs. 600 Rs. 300
= 1000 < 2,500 Rs. 270
0 – <1000 Rs. 450
ICICI Bank
ICICI Bank charges a penalty fee equal to the sum of Rs. 100 and 5 per cent of the shortfall in the required monthly average balance. These charges are applicable to regular savings bank account customers failing to comply with the MAB rules in a month.