RBI Governor Clarifies: Banks Decide Minimum Balance, Not the Central Bank

At a recent financial inclusion drive in Gujarat, RBI Governor Sanjay Malhotra made it clear that setting minimum balance requirements for savings accounts isn’t the central bank’s responsibility. Instead, each bank has the freedom to decide its own norms. This matters to countless depositors across India—especially in Tier 2 cities—where access to banking must balance convenience with cost.

Banks Hold the Reins
Whether it’s ₹2,000 or ₹10,000—or waiving it entirely—the choice of minimum average balance (MAB) is up to individual banks. The RBI does not regulate these thresholds.

Why It Matters Now
This statement follows increased scrutiny over recent moves by private banks, including steep hikes in balance norms. With no uniform rule, customers need to stay alert about changing terms.

What Customers Should Do
If you’re opening a savings account—especially in smaller towns—compare offers carefully. Opt for no-balance or low-balance accounts if you can. Public sector banks and basic accounts may offer better flexibility.

Conclusion
By stepping back from dictating balance rules, the RBI is trusting banks—and customers—to stay informed. For people in smaller cities managing tight budgets, it means vigilance matters more than ever.