Private sector banks collected ₹4,948.71 crore from customers during FY26 as penalties for failing to maintain the required minimum average balance in savings and current accounts. In comparison, public sector banks (PSBs) collected ₹2,137.92 crore, according to data shared by the Finance Ministry in Parliament.
The figures have once again brought attention to minimum balance charges, with consumer groups questioning whether such penalties place an unnecessary burden on small account holders.
Private Banks Collected More Than Twice As Much
The data shows that private banks earned more than double the amount collected by public sector banks through minimum balance penalties during the financial year.
Among private lenders, HDFC Bank topped the list by collecting ₹1,798.14 crore, followed by Axis Bank with ₹1,081.33 crore.
Together, these two banks accounted for ₹2,879.47 crore, representing nearly 58% of the total minimum balance charges collected by all 19 private sector banks.
Public Sector Banks Collected Lower Penalties
Public sector banks collected a combined ₹2,137.92 crore during FY26, substantially lower than their private sector counterparts.
Several PSBs have either reduced or completely withdrawn minimum balance penalties in recent years as part of efforts to make banking services more customer-friendly and promote financial inclusion.
Among public sector banks, Bank of Baroda collected the highest amount through minimum balance penalties, followed by Punjab National Bank and Indian Bank.
Who Is Exempt From These Charges?
The Finance Ministry clarified that Basic Savings Bank Deposit Accounts (BSBDAs), including Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts, are completely exempt from minimum balance penalties.
These zero-balance accounts are designed to ensure access to banking services without requiring customers to maintain a minimum account balance.
The exemption supports the government’s broader financial inclusion initiatives aimed at bringing more people into the formal banking system.
Why Do Banks Levy Minimum Balance Charges?
Banks require customers to maintain a specified Minimum Average Balance (MAB) in certain savings and current accounts. If the balance falls below the prescribed limit, penalty charges may be imposed according to the account type and the bank’s policy.
Banks argue that these charges help recover the operational costs associated with maintaining accounts and encourage customers to maintain adequate balances.
However, consumer advocates have often argued that such penalties disproportionately affect lower-income customers.
Growing Debate Around Customer Charges
As digital banking expands and financial inclusion remains a key policy objective, minimum balance penalties continue to be debated.
While many banks have simplified account offerings and waived charges for specific customer categories, the latest figures show that these penalties remain a significant source of fee income, particularly for private sector lenders.
The discussion is likely to continue as banks balance customer convenience with operational costs and revenue considerations.
Summary
Private sector banks collected ₹4,948.71 crore in minimum balance penalties during FY26, more than twice the ₹2,137.92 crore collected by public sector banks. HDFC Bank and Axis Bank together accounted for nearly 58% of private bank collections, while Jan Dhan and other Basic Savings Bank Deposit Accounts remained fully exempt from such charges.
