Daijiworld Media Network – Mumbai

Mumbai, Jul 7: Bank of Baroda has scrapped charges for non-maintenance of minimum balance in standard savings accounts, effective July 1. The move aligns with similar steps taken by several public sector banks, reflecting a shift in customer-friendly banking practices.

The waiver applies to all regular savings accounts, excluding premium variants. It follows recent decisions by Canara Bank, Punjab National Bank, and Indian Bank, joining State Bank of India (SBI), which led the way back in 2020.

SBI chairman CS Setty recently said the policy has helped first-time account holders. “Even without asking for minimum balance, 95% of the accounts get funded. As a service-oriented measure, we don’t charge,” he told NDTV Profit.

The development comes amid discussions between the finance ministry and public sector banks regarding penalties on low balances. The concern has grown as banks face a dip in current and savings account (CASA) deposits, which stood at 36.8% as of March 2025, down from 39.2% a year ago, as per the RBI’s June Financial Stability Report.

With term and certificate deposits making up 63.2% of total deposits, banks are increasingly relying on higher-cost funding options.

Bankers attribute part of the shift to the evolution of Jan Dhan accounts. While initially low-balance, these accounts have shown a year-on-year rise of 18% in average balances, boosting engagement among over 50 cr new account holders.

As digital banking reduces the cost of servicing individual accounts, banks are leaning on new revenue sources like debit card and transaction fees—moving away from penalties tied to account balances.