Balancing Act: RBI's Stance on Savings Account Minimums

RBI Governor Sanjay Malhotra clarified that banks are independent in deciding the minimum balance for savings accounts. While some private banks increased this limit, public sector banks continue with lower or no minimum balance requirements. Malhotra emphasized the importance of digital literacy for progress and inclusivity in banking.

Recent statements by Reserve Bank of India Governor Sanjay Malhotra highlighted a significant point of contention in the banking sector: the authority of banks to determine minimum balance requirements for savings accounts. Banks can independently decide these minimums, as they do not fall under RBI regulation.

Addressing reporters during a 'Financial Inclusion Saturation Drive' in Gujarat, Malhotra noted that while some private banks, such as ICICI Bank, have recently raised their minimum balance requirements, public sector banks are opting for leniency, foregoing penalties for customers unable to meet minimums.

In addition to discussing account balance policies, Malhotra underscored the necessity of digital literacy for modern advancement, drawing parallels between digital skills and traditional education. The event also reminded attendees of the various government-backed schemes available to enhance financial inclusivity across India.

(With inputs from agencies.)