Kolkata: The country’s banks have earned thousands of crores of rupees by imposing penalties on customers. According to a written reply by Minister of State for Finance Pankaj Chaudhary in the Rajya Sabha, banks collected more than Rs 26,170 crore in penalties from customers for not maintaining a minimum average balance (MAB) in their accounts in the four financial years from FY23 to FY26. Data collected from public sector banks and the Reserve Bank of India (RBI) shows that private banks had the largest share of these recoveries.
Earning from minimum balance charges
In FY26 alone, banks collected Rs 7,086.63 crore through minimum balance charges. Private sector banks accounted for Rs 4,948.71 crore, more than double the Rs 2,137.92 crore collected by public sector banks (PSBs).
The government also stated that public sector banks have significantly reduced such charges in recent years. Ten of the country’s 12 public sector banks have eliminated penalty charges for not maintaining a minimum average balance in savings accounts, while the remaining two have adjusted them based on their board-approved policies and commercial needs.
HDFC Bank leads among private banks
Among private banks, HDFC Bank collected the most through minimum balance charges in FY26, which stood at Rs 1,798.14 crore. The second position was that of Axis Bank with Rs 1,081.33 crore. Together, these two banks accounted for approximately 58% of the total minimum balance charge collections by private sector banks that year.
Other large private banks included ICICI Bank with Rs 353.50 crore, Kotak Mahindra Bank with Rs 290.65 crore, Yes Bank with Rs 195.05 crore and IDBI Bank with Rs 175.15 crore. RBI said data for private banks is not maintained before FY23, while the FY26 figures are preliminary.
SBI tops among PSU banks
Among public sector banks, State Bank of India (SBI) earned the highest amount of Rs 477.27 crore, followed by Bank of Baroda at Rs 394.10 crore and Indian Bank at Rs 299.17 crore. However, the government clarified that SBI’s data relates to current accounts, as the bank waived the minimum balance penalty on savings accounts from March 2020.
Discount continues on zero-balance accounts
The Union finance ministry reiterated that Basic Savings Bank Deposit Accounts, including those opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY), do not require customers to maintain a minimum balance. These accounts offer basic banking services such as deposits, withdrawals, and ATM access free of charge.
Permission to impose minimum balance charge
The ministry also stated that the RBI permits banks to levy minimum balance charges on other savings and current accounts under a board-approved policy, provided these charges are reasonable, transparent, and commensurate with the cost of providing banking services. Banks are required to notify customers through SMS, email, letter, or other appropriate means and generally provide time to maintain the required balance before imposing a penalty.
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