Banks Collect ₹19,000 Crore From Minimum Balance Penalties in 3 Financial Years

Banks across India collected nearly ₹19,000 crore from customers for not maintaining the required minimum balance in their accounts during FY2022-23 to FY2024-25, according to information shared by the Finance Ministry in the Lok Sabha, as reported by The Times of India. 

Private and Public Bank Collections 

Out of the total collections, private sector banks accounted for around ₹11,000 crore, while public sector banks collected ₹8,093 crore during the 3 year period. Among private lenders, HDFC Bank collected the highest penalty amount at ₹3,872 crore, followed by Axis Bank, while Punjab National Bank (PNB) reported the highest collections among public sector banks. 

Changes in Penalty Policies 

Several public sector banks have eased or removed such charges in recent years. State Bank of India waived penal charges for non-maintenance of minimum balance in savings accounts from March 2020. Taking cue from SBI, nine public sector banks including PNB and Canara Bank removed these charges for savings accounts last year, while two other public sector lenders have rationalised the penalty structure. However, private sector banks continue to levy penalties for not maintaining minimum balance. 

Government Statement and Zero-Balance Accounts 

In a written reply, Finance Minister Nirmala Sitharaman said “the amount of ₹8,092.8 crore collected over the last three financial years constitutes approximately 0.2% of the total income of Public Sector Banks during the same period, indicating that such charges form only a very small proportion of banks’ income and are primarily aligned with the cost of providing banking services rather than revenue generation through penalties.” 

She also stated that around 72 crore Basic Savings Bank Deposit Accounts (BSBDA), including accounts opened under the PM Jan Dhan scheme, are not subject to penal charges for non-maintenance of minimum balance, as banks provide zero-balance savings account facilities to ensure universal access to banking services, particularly for unbanked, vulnerable and small depositors, and to promote financial inclusion. 

Read More: IDFC FIRST Bank Pays ₹645 Crore to Clients Over Chandigarh Branch Incident! 

Conclusion 

Data presented in Parliament shows banks collected about ₹19,000 crore in minimum balance penalties during FY2022-23 to FY2024-25, with private sector banks accounting for the larger share of these charges. 

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