Indian Overseas Bank (IOB) has announced a major relief for millions of account holders across the country. Effective 1 October 2025, the bank has completely waived penalties for not maintaining the Minimum Average Balance (MAB) in savings accounts. This move is aimed at easing financial pressure on small account holders, pensioners, and other customers, making banking more inclusive and convenient.

Key Highlights of the New Policy

• The waiver applies to all standard savings accounts, whereas earlier it was limited to select schemes like IOB Sixty Plus, pension accounts, salary accounts, and small savings accounts.

• Customers who were unable to maintain the minimum balance due to financial constraints or oversight will now avoid penalties, ensuring uninterrupted access to banking services.

• Existing charges levied under the old rules until 30 September 2025 remain valid, but going forward, account holders will benefit from the new zero-penalty policy.

IOB Managing Director and CEO Ajay Kumar Srivastava stated that this initiative is a customer-centric step designed to reduce unnecessary financial burden and promote easier banking for all segments of society.

Who Benefits the Most?

The waiver is particularly advantageous for:

1. Small Account Holders: Individuals with irregular income or minimal savings often struggled to maintain the required balance, facing frequent penalties.

2. Pensioners: Retired citizens relying on fixed monthly income can now access their funds without worrying about fines.

3. Low-Income Customers: The waiver encourages financial inclusion by removing barriers that may have prevented people from fully utilizing banking services.

By eliminating MAB penalties, IOB ensures that banking becomes stress-free, especially during festive seasons when transactions typically increase.

Impact on Financial Inclusion

This decision is part of a broader push towards digital and accessible banking. IOB plans to communicate these changes widely via its digital platforms and branch networks, ensuring customers are aware of the benefits. The move also reinforces the bank’s commitment to providing customer-friendly services and promoting financial literacy among the masses.

Financial experts believe that such measures can increase account penetration, encouraging more people to participate in the formal banking system. Moreover, by removing the MAB hurdle, account holders can focus on saving and investing without worrying about incidental penalties.

How Customers Can Benefit

• No need to maintain the previous minimum balance in any savings account under IOB.

• Complete waiver of penalties ensures more disposable income for account holders.

• Enables pensioners and low-income earners to access banking services without stress.

• Simplifies banking during peak periods, such as festivals, when cash flow is crucial.

Bottom Line

IOB’s new MAB waiver policy marks a significant step in customer-focused banking reforms. By removing penalties, the bank not only relieves financial pressure but also strengthens financial inclusion, helping millions of Indians access banking services with ease. This initiative is expected to enhance customer satisfaction and position IOB as a progressive and inclusive bank in India’s competitive banking landscape