Bank of Baroda increases the minimum balance amount by 100%

Bank of Baroda increases the minimum balance amount by 100%

If you hold an account in BOB (Bank of Baroda), be set up to spend additional cash in case you fail to maintain the minimum balance. Bank of Baroda has chosen to expand its minimum balance limit for savings account by 100 percent.

As per to a press release by the bank,  the minimum balance limit has been expanded from Rs 1,000 to Rs 2,000 for savings accounts in urban, metro and semi-urban branches. For savings accounts in the bank's rural branches, then minimum balance limit has been expanded from Rs 500 to Rs 1,000.

The new minimum balances will wind up applicable from February 1, 2019, with the merger of Vijaya Bank and Dena Bank with Bank of Baroda; almost certainly, it is likely that the new minimum balance rules for savings accounts will also be applicable in these two banks also.

The Amount Will You Have To Pay  

While Bank of Baroda has expanded the minimum balance amount by 100 percent, Besides that the bank has not expanded the fine for non-maintenance.The maximum limit of the fine for inability to keep up a minimum balance is Rs 100 for accounts in rural branches and  Rs 200 in semi-urban, urban as well as metro branches. What this effectively means is that beginning February 1, if you hold a bank account in Bank of Baroda or Dena Bank and Vijaya Bank, you will have to ensure that your account has an additional Rs 1,000 for urban, semi-urban and metro locations and Rs 500 for rural in it at all times. So, the burden is not in terms of paying an extra fine, as far as keeping a higher amount in your account.

What is minimum balance charge?

Minimum balance is an amount is set by your bank that you should keep up in your savings account each month. A few banks fix the sum on monthly basis, while some do it on a quarterly basis i.e three months.

According to the rules of the Reserve Bank of India, banks have the authority to self-determine the minimum amount that savings account must keep up. The RBI has also empowered banks to choose the fine they wish to exact for non-maintenance of this amount. However, The Reserve Bank of India guidelines states that the amount and fine should be reasonable.

Are all savings accounts charged this fine?

No. According to RBI rules, savings accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) and fundamental sparing bank stores (BSBD) accounts are exempted from fines required for non-maintenance of minimum balance. A few banks also exempt students’ account, pensioners’ account and accounts operated by senior citizens from this charge.

How much amount banks earn from this?

The banks earn a lot last month the central government informed the Lok Sabha that in the previous four years, public sector banks in India had earned Rs 6,246.44 crore by charging their clients for non-maintenance of minimum balance. Vijaya Bank earned Rs 4.34 crore  Bank of Baroda earned Rs 327.89 crore and Dena Bank Rs 48.77 crore in the past four years. SBI the country’s biggest lender collected the most i.e. Rs 2,893.75 crore.RB