Banks Collected Over ₹26,170 Crore in Minimum Balance Penalties in 4 Years: Government Data

Banks collected more than ₹26,170 crore from customers as penalties for not maintaining the minimum average balance (MAB) in their accounts between FY23 and FY26, according to data shared by the Finance Ministry in the Rajya Sabha. The figures show that private sector banks accounted for the majority of these collections, while most public sector banks (PSBs) have either withdrawn or significantly reduced such charges on savings accounts.

Private Banks Accounted for the Largest Share

In a written reply to the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary said banks collected ₹7,086.63 crore through minimum balance charges in FY26 alone. Of this, private sector banks collected ₹4,948.71 crore, compared with ₹2,137.92 crore collected by public sector banks.

Among private lenders, HDFC Bank collected the highest amount 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) and IDBI Bank (₹175.15 crore).

SBI Led Public Sector Banks, but Savings Accounts Are Exempt

Among public sector lenders, State Bank of India (SBI) reported the highest collection at ₹477.27 crore, followed by Bank of Baroda (₹394.10 crore) and Indian Bank (₹299.17 crore). However, the government clarified that SBI's collections came from current accounts, as the bank has waived minimum balance penalties on savings accounts since March 2020.

The Finance Ministry also noted that 10 of the 12 public sector banks have completely discontinued minimum balance penalties on savings accounts. The remaining two banks have rationalised such charges under their board-approved policies.

Zero-Balance Accounts Continue to Be Protected

The government reiterated that Basic Savings Bank Deposit Accounts (BSBDAs), including accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY), are exempt from minimum balance requirements. Around 73 crore such accounts currently do not attract any penalty for non-maintenance of minimum balance.

The RBI allows banks to levy minimum balance charges on other savings and current accounts, provided the charges are reasonable, transparent, and communicated to customers in advance, giving them an opportunity to restore the required balance.

Read more: Best Gold Mutual Funds in India for August 2026: Kotak Gold Fund, Axis Gold Fund, & More Based on 3Y CAGR.

Conclusion

The latest government data highlights the significant revenue banks continue to earn from minimum balance penalties, particularly private lenders. While most public sector banks have eliminated such charges on savings accounts, customers with regular savings and current accounts should remain aware of their bank's minimum balance requirements to avoid avoidable penalties.

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