Current Affairs - Banking

Canara Bank has become the first major public sector bank in India to eliminate the minimum balance requirement across all types of savings bank accounts, including regular, salary, and NRI accounts. This reform means customers will no longer face penalties for failing to maintain an Average Monthly Balance (AMB), a practice that previously discouraged low-income and rural populations from accessing formal banking services. The move is aimed at boosting financial inclusion and simplifying banking access for a broader demographic, including students, salaried workers, and rural communities. It reflects Canara Bank's commitment to customer convenience and inclusive financial practices.

The State Bank of India (SBI), through its latest economic research report, projected that India’s household net financial savings could reach ₹22 lakh crore in FY2024–25, amounting to 6.5% of the Gross National Disposable Income (GNDI). This projection marks a significant rise from previous years and reflects growing economic confidence and household financial stability post-pandemic. The SBI report not only highlights this surge in savings but also analyzes broader financial trends including the Reserve Bank of India's record ₹2.69 lakh crore surplus transfer, an 8.19% increase in its balance sheet, and a notable shift in fraud patterns in the financial sector.

Indian Overseas Bank (IOB) has collaborated with Amul and Richplus by signing a tripartite Memorandum of Understanding (MoU) aimed at promoting organic farming in India. As part of this initiative, IOB introduced a co-branded Organic Farming Card specifically for its account holders involved in organic farming. Additionally, IOB launched a dedicated credit scheme called “Harit Kranti” to support this cause, while Richplus provides technical expertise, demonstrating a combined effort to boost sustainable agricultural practices.

Canara Bank reported a significant 33.19% increase in its net profit for Q4 FY25, reaching ₹5,004 crore compared to ₹3,757.23 crore in the previous year. This growth was driven by higher interest income and strong operational performance, despite a slight dip in net interest margins. The bank also saw improvements in asset quality, with a reduction in gross and net non-performing assets (NPAs). Canara Bank’s global business, advances, and deposits showed double-digit growth, reflecting its solid position in the public sector banking space and its contribution to economic growth.

In May 2025, Union Bank of India, in collaboration with Canara Bank, introduced specialized deposit schemes aimed at addressing the decline in deposit growth rates. These innovative offerings provide not only attractive financial returns but also bundled lifestyle and health-related benefits. The initiative reflects a strategic move by public sector banks to enhance customer loyalty, attract high-value deposits, and differentiate themselves in a competitive financial environment. With personalized services, concessions based on account balances, and added perks like health insurance, Union Bank is positioning itself as a modern, customer-focused institution seeking to adapt to evolving banking demands.