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DBS Bank India has announced a sharp revision in its penalty structure for non-maintenance of minimum balance in savings accounts. Effective June 1, 2025, customers failing to maintain the monthly average balance (MAB) of ₹10,000 will now be liable to pay a 6% penalty on the shortfall amount, capped at a maximum of ₹500. This marks the first time the bank has introduced such a steep penalty, drawing the attention of account holders across the country.

🔔 New Rules Effective from June 1

According to the latest customer communication shared via email, DBS Bank emphasized its commitment to “transparency and better banking experience.” The updated rule, coming into effect from June 1, 2025, replaces the older penalty structure of 4% on shortfall, which was earlier capped at ₹400. The revised policy introduces a 25% increase in penalty rates and caps, raising concerns among customers about costlier banking if balances are not properly managed.

💸 What’s the New Penalty Structure?

Here's how the penalty will be calculated under the new rule:

• Minimum required MAB: ₹10,000

• Penalty for shortfall: 6% of the deficit amount

• Maximum charge: ₹500

Example:
If a customer maintains an average balance of only ₹5,000 in a month, the shortfall would be ₹5,000.
Penalty = 6% of ₹5,000 = ₹300.
If the shortfall were ₹10,000 or more, the penalty would be capped at ₹500.

The bank has advised customers to regularly monitor their balance and ensure compliance to avoid unnecessary charges.

🏦 Why Has DBS Made This Change?

The bank states that the revision is part of its effort to streamline account management and ensure that customers stay aligned with the evolving cost structure of banking services. With rising operational expenses and changing regulatory norms, many banks are re-evaluating their minimum balance and fee structures to maintain service efficiency and profitability.

💳 Changes in ATM Withdrawal Charges

Alongside the MAB penalty hike, DBS Bank has also updated its ATM withdrawal policy:

• Free withdrawals from other banks’ ATMs will remain limited as per standard rules.

• After exceeding the free transaction limit, customers will now be charged ₹23 per transaction, as per RBI guidelines, which took effect from May 1, 2025.

• These charges are exclusive of GST and applicable taxes.

• Unlimited free withdrawals from DBS Bank ATMs remain available without any additional charge.

📩 Official Notification to Customers

In an official email, DBS Bank wrote:

“We are committed to sharing timely updates that help you make informed financial decisions. This change to the MAB penalty structure is being made to align with industry standards and to ensure the long-term sustainability of our services.”

📌 What Should Customers Do?

Customers are encouraged to:

• Regularly check their account balance

• Set alerts for low balances

• Use DBS Bank ATMs for cash withdrawals to avoid additional fees

• Maintain the required monthly average balance of ₹10,000 to avoid penalties

🔍 Final Thoughts

While fixed deposit interest rates and digital banking features are attracting customers, the rise in penalty charges by major banks like DBS India is a reminder that minimum balance rules shouldn’t be ignored. These revised policies, though stringent, are becoming standard practice in the banking sector.

As a customer, staying informed and proactive about your account management can help you avoid unnecessary costs and ensure a smoother banking experience.

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