Checked your bank account in the first week of a new month and found an unexpected charge? You’ve probably encountered what happens when the MAB requirement isn’t met. MAB — Monthly Average Balance — is the minimum average balance a bank requires account holders to maintain across a calendar month, and failing to maintain it triggers an automatic penalty.
MAB and AMB (Average Monthly Balance) mean exactly the same thing. Different banks prefer different terms — HDFC Bank and Axis Bank typically say ‘MAB’; some others say ‘AMB’. The calculation is identical regardless of the label.
| Parameter | Details |
| Full Form | Monthly Average Balance |
| Also Called | AMB (Average Monthly Balance), QAB (Quarterly Average Balance at some banks) |
| Formula | Sum of all daily closing balances ÷ Number of days in the month |
| Metro Requirement | Rs.5,000 to Rs.25,000 depending on bank and account type |
| Semi-urban/Rural | Rs.1,000 to Rs.5,000 (lower thresholds reflect lower banking costs) |
| Penalty | Rs.100 to Rs.600 + 18% GST per month if MAB is not maintained |
| Zero MAB Accounts | BSBDA, Jan Dhan (PMJDY), most salary accounts, some digital savings accounts |
| Distinct From | Minimum Balance — which must be maintained every single day |
| Penalty Deducted | Automatically at month-end from your account balance |
MAB vs Minimum Balance — The Practical Difference
Here’s what confuses most people: MAB and minimum balance are not the same requirement. A minimum balance of Rs.10,000 means you must never let your account fall below Rs.10,000 on any day. Dip to Rs.9,500 on the 15th and you’re penalised. MAB of Rs.10,000 means the average across all days of the month must be Rs.10,000 — but you’re free to have Rs.2,000 on some days as long as higher balances on other days bring the monthly average up.
Practically, this means a salaried employee who receives Rs.50,000 on the 1st and spends most of it by month-end has a high balance early in the month and a low balance near the end. If the bank asks for MAB of Rs.10,000 and the high early balance compensates for the low late balance, no penalty is triggered — even if the account had Rs.1,000 on the 28th.
The MAB calculation is automated by the CBS — you don’t need to calculate it manually. Most bank mobile apps show a running MAB indicator so you can see whether you’re on track to meet the requirement before the month closes. If you’re running short, a temporary deposit in the last few days can rescue the monthly average.
Account types matter enormously here. A Jan Dhan account has zero MAB requirement — it’s a fundamental feature of that scheme. Basic savings accounts (BSBDA) also have zero MAB. Salary accounts from most banks have zero MAB as long as salary credits continue — though this condition varies by bank. Digital bank accounts (from players like Fi, Jupiter, or IDFC FIRST Bank) often carry zero MAB as a selling point.
Frequently Asked Questions
Q: What does MAB stand for in banking?
A: MAB stands for Monthly Average Balance — the average of daily closing balances in a bank account over a calendar month, which must meet the bank’s specified minimum to avoid a non-maintenance penalty.
Q: How do I calculate my MAB?
A: Add your account’s closing balance for every single day of the month, then divide by the number of days in that month. Your bank’s app typically shows this in real time. If you’d rather not do the math, just keep a reasonable buffer above the required threshold throughout the month.
Q: What is the MAB requirement for zero-balance accounts?
A: By definition, zero-balance accounts — Jan Dhan, BSBDA, most salary accounts — have no MAB requirement. You can hold Rs.0 in the account without penalty. This is precisely why Jan Dhan accounts were introduced as the gateway to financial inclusion.
Q: Can I switch to a zero-MAB account to avoid penalties?
A: You can request a bank to convert your regular savings account to BSBDA, but BSBDA accounts come with restrictions — no more than four withdrawals per month, no overdraft facility, no credit card linkage. If you need those features, consider a salary account type or a bank that offers zero-MAB regular savings accounts.
