New Minimum Balance Rules:The rules for maintaining minimum balances in Indian banks are changing in 2026, and these changes could affect millions of account holders. Savings accounts, once considered simple and convenient tools for managing money, have become more strict and costly due to updated minimum balance requirements. Major banks like State Bank of India (SBI), Punjab National Bank (PNB), and HDFC Bank are enforcing these rules more rigorously, making it important for customers to understand how these changes will impact their finances.

Why Banks Are Toughening Minimum Balance Rules

Banks rely on various ways to earn money, and penalties for not maintaining the required balance have become an important source of income. With interest rates under pressure and loan profits decreasing, banks are turning to fees to boost revenue. Automated banking systems now track balances daily, leaving no room for the discretion that branch managers once had. This means that customers are automatically penalized if their account falls below the required balance, turning previously minor oversights into recurring charges.

Banks also want to encourage “profitable behavior” among account holders. Accounts with low balances cost banks to maintain, and by enforcing stricter rules, banks either earn penalties or ensure customers maintain higher deposits. As one former banker explained, a savings account today is not just a service; it is a financial tool that benefits the bank’s balance sheet.

PNB Introduces a Tiered Minimum Balance System

Punjab National Bank has introduced a tiered minimum balance system based on geography. Metro branch customers are now required to maintain higher balances than those in rural areas. PNB says this is due to higher operating costs in cities, but critics argue that urban customers already face high living expenses, making these balances harder to maintain. Penalties are automatically deducted every month, and if an account holder falls short repeatedly, charges can accumulate and create a compounding effect, disproportionately affecting low-balance customers.

SBI Focuses on Stricter Enforcement

SBI’s minimum balance thresholds remain relatively low compared to other banks, but the bank has upgraded its monitoring systems. These systems calculate average monthly balances with precision, leaving no room for error. Many customers are surprised when penalties are applied quarterly, often discovering multiple charges at once. The problem is not that rules are unclear, but that customers underestimate how strictly the calculations are enforced. SBI maintains that transparency exists, though customers must read the fine print carefully to understand it.

HDFC and the Cost of Premium Banking

HDFC Bank continues to cater to higher-income customers with the highest minimum balance requirements, especially in metro areas. The bank justifies this with better services, faster grievance handling, and advanced digital infrastructure. For salaried professionals with stable incomes, this model works well, but freelancers and small business owners with uneven cash flow may find it punishing. Penalties increase as account balances drop, making short-term financial challenges potentially costly over time.

Understanding Average Monthly Balance

One of the most important changes in 2026 is the strict calculation of the average monthly balance (AMB). Banks add each day’s closing balance and divide it by the number of days in the month. This method penalizes even brief periods of low balance, regardless of the end-of-month total. Festival spending, medical emergencies, or late salary credits can quickly reduce the average, leading to penalties. Many consumers are unaware of this calculation method or how unforgiving it has become.

Who Benefits and Who Doesn’t

Not all account holders are affected equally. Senior citizens, students, and government scheme beneficiaries often qualify for relaxed or zero-balance accounts. Salary account holders also enjoy advantages, provided their accounts are correctly tagged. Problems arise when documentation is outdated or account types are misclassified, leading to unexpected penalties. Customers are advised to review their account category regularly, especially after retirement, job changes, or branch transfers.

The Future of Banking in India

The tightening of minimum balance rules shows a shift in Indian banking philosophy. Banks are focusing more on profitability and less on universal access. Customers unable to maintain higher balances may start moving to zero-balance accounts offered by fintech companies, cooperative banks, or payment banks. While regulators are observing these changes, no immediate action is expected. For now, customers must adapt to a banking environment that is precise, strict, and more expensive for those who do not maintain adequate balances.

Disclaimer: This article is for informational purposes only. Minimum balance requirements, penalties, and exemptions may vary by account type, branch, and individual circumstances. Readers should verify the latest details directly with their bank or through official notifications before making financial decisions.