Indian Bank Waives MAB Charges Across SB Accounts, Reduces MCLR To 9 Per Cent

Indian Bank has announced the removal of the minimum monthly average balance (MAB) requirement for its savings accounts, effective July 7, 2025. With the implementation of the ‘No MAB’ requirement, account holders will not incur any charges for not maintaining the minimum balance. Following the 50 basis points (bps) repo rate cut by the Reserve Bank of India (RBI) in June 2025, banks have been revising their deposit and lending rates to align with the changes in policy rates. To reflect the impact of the policy rate adjustments, Indian Bank has also revised and reduced its Marginal Cost of Fund-Based Lending Rate (MCLR), effective July 3, 2025.

Savings Accounts MAB Charges Removal

The public sector bank waived off MAB charges across all its savings bank accounts from the coming week (July 7, 2025).

The Bank took this measure as a customer-centric initiative to bring more people under the banking and financial system. The move is aimed at fostering financial inclusion by removing the need to maintain a minimum balance and making savings bank accounts affordable to all.

“This landmark move is set to benefit a vast spectrum of Indian Bank account holders, ranging from students and senior citizens to small business owners and rural customers. The waiver is expected to encourage more individuals, especially those from underserved communities, to enter the formal banking system”, the Bank said.

MCLR Reduced To 9.00 Per Cent

The Bank reduced its one-year MCLR to 9.00 per cent effective July 3, 2025. This is 0.05 per cent or 5 bps lower than its previous 9.05 per cent MCLR. 

MCLR is a basic minimum lending rate at which a bank can lend money. In other words, they cannot lend money below this minimum rate. RBI introduced MCLR in 2016 as a benchmark rate for floating-rate loans. It is calculated based on the marginal cost of funds, operating cost, and the tenure of the loan.

The change in MCLR affects all floating-rate consumer loans, such as home loans, auto loans, etc. It does not apply to fixed-rate consumer loans.

Both removal of MAB charges and reduction in MCLR initiatives are likely to benefit nearly 11 crore (10,92,93,501) customer base in its 5,880 branches, or may attract more people to open accounts and enjoy banking services.

Recently, Punjab National Bank and Canara Bank have also eliminated their MAB charges for savings bank accounts. PNB has reduced its savings bank account interest rates also by 20 bps from 2.70 per cent to 2.50 per cent, effective July 1, 2025. Several banks, including PNB and Canara Bank, are revising their deposit and lending rates to align with the policy rate. Many banks have reduced their fixed deposit rates after the repo rate change in June 2025.

While lower interest rates benefit borrowers, depositors face reduced fixed deposit rates and they need to contend only with the removal of maintenance charges in savings accounts.