Banks across the country collected at least ₹27,973.01 crore as penalties for non-maintenance of minimum average balance (MAB) in accounts during the past five years. Public sector banks (PSBs) account for ₹12,033.39 crore over five financial years, while private sector banks collected ₹15,939.62 crore over four financial years for which data is available, the Union government informed the Rajya Sabha.
The government also said that 10 of the country's 12 PSBs have discontinued penal charges on savings accounts to promote customer-centric and inclusive banking.
Replying
to an unstarred question by member of Parliament (MP) Abdul Wahab, minister of state for finance Pankaj Chaudhary said the figures are compiled from information received from PSBs and the Reserve Bank of India (RBI). The government provided bank-wise and year-wise details of minimum balance penalties, as well as category-wise details of ATM charges, debit card charges and account maintenance fees collected by PSBs. RBI, however, does not maintain a category-wise break-up of such charges for private sector banks.
Among PSBs, State Bank of India collected ₹1,600.77 crore over the five-year period. The government clarified that these collections relate only 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 collected ₹2,028.94 crore, Indian Bank ₹1,776.85 crore, Canara Bank ₹1,524.08 crore, and Punjab National Bank ₹1,896.38 crore during the same period.
Among private sector banks, HDFC Bank reported the highest collections, amounting to ₹5,669.91 crore between FY22-23 and FY25-26 (provisional). It was followed by Axis Bank with ₹3,787.30 crore, ICICI Bank with ₹1,578.29 crore, and Kotak Mahindra Bank with ₹998.41 crore. RBI informed the government that data for private sector banks prior to FY22-23 is not maintained, and the FY25-26 figures are provisional.
The government stressed that basic savings bank deposit accounts (BSBDAs), including accounts opened under the pradhan mantri jan dhan yojana (PMJDY), are exempt from such penalties. These zero-balance accounts do not require customers to maintain a minimum balance and provide basic banking services, including deposits, withdrawals and ATM access, free of charge.
According to the government, about 73 crore BSBDAs, including PMJDY accounts, are not subject to any penal charges for non-maintenance of minimum balance.
The government further said that public sector banks have reviewed their service charge structures. Of the 12 PSBs, ten have completely discontinued penal charges for non-maintenance of minimum average balance in savings accounts, while the remaining two have rationalised such charges in accordance with their board-approved policies and commercial considerations.
As per RBI's existing instructions, banks may levy charges for non-maintenance of the minimum average balance, in line with their board-approved policies, provided such charges are reasonable, transparent, and commensurate with the cost of providing services. Banks have also been advised to notify customers by SMS, email, letter, or other appropriate means before applying such penalties, and to generally provide customers time to restore the required balance.
The government also shared category-wise data on revenue earned by PSBs from ATM charges, debit card annual maintenance charges and account maintenance fees during the last five financial years. The figures show that SBI generated the highest income under these heads. SBI earned ₹1,650 crore from ATM charges during FY25-26, ₹3,117.03 crore from debit card annual maintenance charges, and ₹232.91 crore as account maintenance fees, the latter being levied on current accounts. Other major PSBs also reported substantial income from debit card annual maintenance charges. Union Bank of India collected ₹756.58 crore from debit card charges in FY25-26, followed by Bank of Baroda (₹631.35 crore), Indian Bank (₹552.41 crore), Punjab National Bank (₹440.21 crore) and Bank of India (₹407.28 crore).
The data further shows that while debit card annual maintenance charges remained a significant source of fee income for most PSBs, account maintenance fees were reported only by SBI, as these charges are applicable to its current accounts.
The ATM charge figures represent the net income earned from customer cash withdrawal charges and inter-change fees received from other banks after adjusting inter-change fees paid to other banks which explains why several banks reported negative values under this head in different years. The government reiterated that no penal charges are levied on BSBDAs, including PMJDY accounts, ensuring that holders of these zero-balance accounts remain exempt from such charges.
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