# ABB in banking: meaning and how it is read

> ABB is average bank balance. Credit teams use it to judge whether an account's usual balance can carry a proposed EMI.

Source page: https://creditbrief.in/posts/abb-meaning
Published: 2026-11-06
Publisher: CreditBrief

ABB stands for average bank balance. It is a simple measure of how much money usually sits in an account, taken from the bank statement.

There is no single method. Two common ones:

- **Daily average:** add each day's closing balance, then divide by the number of days.
- **Sample dates:** average the closing balance on fixed dates each month, such as the 5th, 15th and 25th.

## Example, made-up numbers, sample dates

| Month | 5th | 15th | 25th | Average |
|---|---|---|---|---|
| Sep | 2.0 | 3.5 | 1.0 | 2.17 |
| Oct | 1.5 | 4.0 | 1.5 | 2.33 |
| Nov | 2.5 | 3.0 | 0.5 | 2.00 |
| **ABB, ₹ lakh** | | | | **2.17** |

## How it gets read

Credit teams often compare ABB with the proposed EMI, as an EMI to ABB ratio. A balance can also be arranged to look good, so ABB alone proves little. Check it alongside:

- Whether balances spike only around statement or EMI dates
- Inward and outward bounces
- Whether large credits come from the business, or from related accounts

Which dates and thresholds apply is a matter for your institution's policy.

Indicative only. Verify against your institution's policy.