Banks across India have collectively gathered over ₹26,100 crore from customers as penalties for failing to maintain the stipulated minimum average balance in their accounts over the last four financial years (FY23-FY26).
The latest government data, presented by Minister of State for Finance Pankaj Chaudhary in the Rajya Sabha, reveals that in the financial year 2025-26 alone, banks collected ₹7,086.63 crore in such charges. This figure contributes to the total of ₹26,170.37 crore accrued between FY23 and FY26.
Public vs. Private Sector Collections
The data provides a clear split between public and private sector banks for the FY26 period:
- Public Sector Banks (PSBs): Collected ₹2,137.92 crore in penalties.
- Private Sector Banks: Accounted for a larger share, collecting ₹4,948.71 crore.
Leading Banks in Penalty Collections (FY26)
Among the public sector banks, State Bank of India (SBI) recorded the highest collection at ₹477.27 crore. However, it's crucial to note that this amount primarily pertains to current accounts, as SBI has waived penal charges for non-maintenance of minimum average balance in savings accounts since March 2020. Bank of Baroda followed, collecting ₹394.1 crore.
In the private sector, HDFC Bank led with a significant ₹1,798.14 crore in penalties, followed by Axis Bank, which collected ₹1,081.33 crore.
Regulatory Directives and Customer Centricity
Minister Chaudhary highlighted that the Reserve Bank of India (RBI) advises banks to notify customers via SMS, email, or other appropriate means when their balance falls below the minimum requirement. Customers are typically given time to restore the balance before any penal charges are applied.
Furthermore, to enhance customer centricity, 10 out of 12 public sector banks have discontinued penal charges for non-maintenance of minimum average balance in savings accounts, while the remaining two have rationalized these charges in line with their board-approved policies.
Zero-Balance Accounts Remain Exempt
The minister also reiterated that banks offer zero-balance savings account facilities, such as Basic Savings Bank Deposit Accounts (BSBDAs), including those opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY). These accounts are designed to ensure universal access to banking and financial inclusion, and crucially, they are exempt from any minimum balance requirements or associated penal charges. Approximately 73 crore BSBDAs, including PMJDY accounts, fall under this exemption.
The RBI's standing instructions permit banks to levy charges for non-maintenance of minimum average balance in accordance with their board-approved policies, provided such charges are reasonable, transparent, and commensurate with the cost of providing the services.