Banks Made ₹27,973 Cr From Penalising Customers For Low Balances: What The Data Shows

Banks collected ₹27,973.01 crore as charges for non-maintenance of the minimum average balance (MAB) in savings and current accounts during the last five years, according to the data shared by Minister of State for Finance Pankaj Chaudhary in the Rajya Sabha on Tuesday.

The total collection for last four fiscals by the private and public banks comes out to be ₹26,170.37 crore, based on information received from public sector banks (PSBs) and the Reserve Bank of India (RBI), as cited by the Finance Ministry in the Parliament.

Since, the data for penalty collection by the private banks for financial year 2022 was not available, the comparative figures for both private and public banks have been taken from last four financial years from FY2022-23 to FY2025-26.

Private sector banks accounted for around 60.9% of the total collections, contributing ₹15,939.62 crore, while public sector banks collected the remaining ₹10,230.75 crore.

Under existing RBI guidelines, banks may levy minimum balance charges on other savings and current accounts, provided the charges are reasonable, transparent and proportionate to the cost of providing the services.

Banks have also been advised to notify customers through SMS, email, letter or other appropriate means and generally provide customers time to restore the required minimum balance before penalties are imposed. The different kinds of bank penalties include ATM charges, debit card charges and account maintenance charges.

Pvt Banks Collected Nearly ₹16,000 Cr

Private sector banks collected ₹15,939.62 crore in minimum balance charges between FY2022-23 and FY2025-26, accounting for nearly 61% of the total collections during the period.

Collections rose steadily over the four years, from ₹3,171.96 crore in FY2022-23 to ₹3,620.07 crore in FY2023-24, ₹4,198.88 crore in FY2024-25, and ₹4,948.71 crore in FY2025-26, according to RBI data. The FY2025-26 figures are provisional.

Among private lenders, HDFC Bank reported the highest collections in FY2025-26 at ₹1,798.14 crore, followed by Axis Bank at ₹1,081.33 crore.

Other major contributors included ICICI Bank (₹353.50 crore), Kotak Mahindra Bank (₹290.65 crore), Yes Bank (₹195.05 crore), IndusInd Bank (₹177.92 crore), IDBI Bank (₹175.15 crore) and IDFC First Bank (₹163.81 crore).

Public Banks Collected Over ₹12,000 Cr

Public sector banks collected ₹10,230.75 crore through minimum balance penalties during FY2022-23 to FY2025-26.

Collections stood at ₹2,407.82 crore in FY2022-23, increased to ₹2,909.10 crore in FY2023-24, moderated to ₹2,775.91 crore in FY2024-25, and declined to ₹2,137.92 crore in FY2025-26, according to data submitted by the government.

Among public sector lenders, State Bank of India (SBI) reported the highest collection in FY2025-26 at ₹477.27 crore, followed by Bank of Baroda (₹394.10 crore) and Indian Bank (₹299.17 crore).

The ministry clarified that SBI's collections relate only to current accounts, as it has waived penal charges for non-maintenance of minimum balance in savings accounts since March 2020.

Public banks also collected ₹1,802.64 crore in FY2021-22, taking the total collection over last five fiscals to ₹12,033.39 crore. If we add public banks' FY22 penalty to ₹26,170.37, then the total collection will rise to ₹27,973.01 crore but without private banks' FY22 collection data.

Private Banks Outpace PSBs

Private sector banks collected more through minimum balance penalties than PSBs in each of the four financial years covered by comparable data.

In FY2022-23, private lenders collected ₹3,171.96 crore, compared with ₹2,407.82 crore by PSBs.

The gap widened in FY2023-24, when private banks collected ₹3,620.07 crore, against ₹2,909.10 crore by public sector banks.

In FY2024-25, private lenders collected ₹4,198.88 crore, significantly higher than the ₹2,775.91 crore collected by PSBs.

The trend continued in FY2025-26, with private banks collecting ₹4,948.71 crore, more than double the ₹2,137.92 crore collected by public sector banks.

Zero-Balance Accounts Remain Exempt

The Finance Ministry said around 73 crore Basic Savings Bank Deposit Accounts (BSBDAs), including accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY), are exempt from minimum balance requirements.

These zero-balance accounts provide basic banking services, including deposits, withdrawals and ATM access, without attracting penal charges for non-maintenance of balance.

The government also said 10 of the country's 12 public sector banks have discontinued penal charges for non-maintenance of minimum average balance in savings accounts, while the remaining two have rationalised such charges in line with their board-approved policies and commercial considerations.