Indian Banks Collect Rs 19,083 Crore from Minimum Balance Penalties in Three Years

Indian Banks Recover Rs 19,083 Crore in Penal Charges for Non-Maintenance of Minimum Monthly Average Balance

Key Highlights

• Indian banks have collectively recovered Rs 19,083 crore in penal charges for non-maintenance of minimum monthly average balance (MAB) in current and savings accounts over three financial years up to FY 2024-25.
• Public sector banks (PSBs) collected Rs 8,092.83 crore from deposit account holders, while private sector banks collected Rs 10,990.91 crore during the same period.
• The collection by PSBs constitutes approximately 0.23 percent of their total income.

PSBs' Collection Trends

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• PSBs' collection for non-maintenance of MAB penal charges in FY 2024-25 dropped 4.58 percent from FY 2023-24, though it's 13.26 percent up from FY 2022-23.
• In contrast, private banks collected nearly twice as much in MAB service charges as public sector banks.

Bank-Wise Details

Regulatory Guidelines

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• Banks are advised to notify customers through SMS, email, letter or other appropriate means in cases of non-maintenance of the agreed minimum balance in bank accounts.
• Customers are generally provided time to restore the required minimum balance before penalty charges are applied as per extant regulatory guidelines.
• Fees generally range from Rs 25 to Rs 500 or more per month, depending on the bank, account type, and location, with an additional 18 percent GST applicable.

Exemptions

• Banks do not charge a non-maintenance fee for accounts under Basic Savings Bank Deposit Accounts (BSBDAs), including accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY).