Banks net Rs 19,000 crore from minimum balance fine

NEW DELHI: Private sector and state-run banks raked in around 19,000 crore from account holders for not maintaining minimum balance in three financial years — 2022-23 to 2024-25.

While private sector banks mopped up around Rs 11,000 crore, public sector players collected Rs 8,093 crore, according to data shared by the finance ministry in Lok Sabha on Monday.

Among private banks, HDFC Bank collected the maximum of Rs 3,872 crore, followed by Axis Bank, while in case of public sector banks, Punjab National Bank (PNB) topped the list (see graphic).

State Bank of India, the country’s largest bank, waived off penal charges for not maintaining minimum balance in saving accounts since March 2020. Taking cue from it, another nine public sector banks, such as PNB and Canara Bank, have done away with such charges for savings bank accounts since last year, while two others have also rationalised this charge. However, private sector banks are charging the penalty for not maintaining minimum balance.

In a written reply, finance minister Nirmala Sitharaman said, “The amount of Rs 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.”

The FM said about 72 crore Basic Savings Bank Deposit Accounts (BSBDA), including those under the PM Jan Dhan scheme, are not subject to any penal charges for non-maintenance of minimum balance. She said banks offer zero-balance savings accounts facility for these accounts to ensure universal access to banking facilities, particularly for unbanked, vulnerable and small depositors, and to promote financial inclusion.