Indian Overseas Bank (IOB) has announced significant changes to its account policies and faced regulatory action, marking a mixed week for the public sector lender.

Waiver of Minimum Balance Charges

IOB has decided to waive penal charges for non-maintenance of minimum average balance in its regular savings accounts, effective October 1, 2025. This waiver will apply specifically to SB-Public accounts, providing relief to a large number of account holders. However, it's important to note that charges up to September 30, 2025, will continue under existing rules.

Managing Director & CEO Ajay Kumar Srivastava stated that this decision aims to "provide relief to account holders and improve banking experience." This move is expected to benefit many customers who struggle to maintain the required minimum balance in their accounts.

Exceptions to the Waiver

While this is good news for regular savings account holders, the bank clarified that premium savings accounts will not be included in this waiver. Accounts such as SB-MAX, SB-HNI, SB Prime, SB Priority, SB Privilege, and NRI accounts will continue to incur penalties for minimum balance shortfalls.

It's worth noting that IOB had previously waived such charges for government schemes like Pradhan Mantri Jan-Dhan Yojana and pensioner accounts, demonstrating a pattern of easing financial burdens on certain account holders.

RBI Penalty for Non-Compliance

In a separate development, the Reserve Bank of India (RBI) has imposed a penalty of ₹31.80 lakh on Indian Overseas Bank. According to the LODR (Listing Obligations and Disclosure Requirements) data filed by the bank, this penalty is related to non-compliance with Priority Sector Lending (PSL) directions.

Specifically, the bank was found to have collected loan-related charges on PSL accounts with sanctioned loans up to ₹25,000. This action was taken following the Statutory Inspection for Supervisory Evaluation (ISE 2024) conducted by RBI, which examined the bank's financial position as of March 31, 2024.

The penalty was imposed under the provisions of Section 47A(1)(c) read with Section 46(4)(i) and 51(1) of the Banking Regulation Act, 1949. IOB stated in its disclosure that this penalty would have no impact on the bank's financial, operational, or other activities.

Market Response

Despite the regulatory penalty, IOB's shares closed 2.67% higher at ₹39.54 on the day of these announcements. However, it's important to note that the bank's shares have seen a significant decline of 31.51% over the past 12 months, indicating ongoing challenges for the lender.

These developments highlight the complex landscape that public sector banks like IOB are navigating, balancing customer-friendly initiatives with regulatory compliance and financial performance.

Indian Overseas Bank (IOB), a prominent public sector bank, has announced a significant change in its top leadership. The Central Government has extended the tenure of Joydeep Dutta Roy as Executive Director for an additional three years, showcasing confidence in his leadership and contributions to the bank.

Key Details of the Extension

• Extended Tenure: Joydeep Dutta Roy's term as Executive Director has been extended for three years beyond October 20, 2025, or until further orders, whichever is earlier.
• Legal Basis: The extension was granted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the Nationalized Banks (Management and Miscellaneous Provisions) Scheme, 1970.
• Official Notification: The Central Government issued the extension through Notification eF. No.4/4(i)/2024-BO.I dated September 15, 2025.

About Joydeep Dutta Roy

Regulatory Compliance

The bank has duly informed the stock exchanges about this development, in compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations.

Market Impact

This extension of Mr. Roy's tenure is expected to ensure continuity in the bank's leadership and strategic direction. As Executive Director, Joydeep Dutta Roy plays a crucial role in shaping the bank's policies and overseeing its operations.

Indian Overseas Bank continues to be a significant player in India's banking sector. This leadership stability could be viewed positively by investors and stakeholders, potentially influencing the bank's performance and market perception in the coming years.

The extension of Mr. Roy's tenure reflects the government's trust in his capabilities and the bank's current leadership team. It remains to be seen how this continuity in top management will translate into the bank's performance and strategic initiatives in the evolving banking landscape.