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What is MAB and how is it calculated for Smart Business Account ?

MAB or Monthly Average Balance is the average of day end balances in the account for all the days in a month. Given below is an example of how MAB is calculated:

A sample bank statement of March 2013:

DateTransactionsDebit AmountCredit AmountBalance at the end of day
1-Mar-2013A-10,00,00010,00,000
10-Mar- 2013B1,00,000-9,00,000
20- Mar-2013C2,00,0003,00,00010,00,000
31-Mar-2013D5,00,000-5,00,000
MAB   7,74,193

MAB Calculation:

Total Balance in March 2013
= (10,00,000 * 9 days) + (9,00,000 * 10 days) + (10,00,000 * 11 days) + (5,00,000 * 1 day)
= 24,000,000 (2.4 Cr)

Total No. of days in the month = 31

Monthly Average Balance (MAB) of March 2013

= 24,000,000/ 31
= Rs. 7,74,193