The minimum average monthly / quarterly balance typically varies from Rs.1000 [in public sector banks] to Rs.10,000 or even more [in private sector banks]. And the penalty is around Rs.100 to Rs.500.
Let us suppose that your bank has stipulated Rs.5,000 as the Minimum Average Balance you must have in your Savings Account. Now, it is important to note that you DON'T have to ALWAYS keep at least Rs.5,000 in order to avoid the penalty. No. The operative word is "average". In other words, the average of the daily balances should not drop below Rs.5000. Let us see how to calculate this Average Balance.
Given below is an example of daily end-of-the-day balances in your account for the month of May:
Sum total of daily balance = 1,56,250
No. of days in the month = 31
Average balance = 156250 / 31 = 5,040
Extremely simple and straightforward.
Savings Accounts pay a miserly 4% p.a. interest. So it makes ample sense to keep just the bare "minimum" money in such accounts. However, to avoid paying any penalty it is a good idea to always check the 'average balance' a few days before the end of the month and deposit the required amount, if any, to take it above the minimum mark.
[By the way, there is one area where "minimum" must be avoided at all costs. Read 'Minimum Amount Due means Maximum Financial Destruction']