Maintaining a minimum average balance (MAB) in savings accounts has turned out to be a costly affair for millions of bank customers across India. Official figures disclose that commercial banks accumulated a staggering ₹26,100 crore in penalties over a four-year period from account holders who failed to maintain the stipulated balance levels. These charges were levied across both public sector and private sector banks under their respective service charge guidelines, significantly impacting customers who struggle to retain prescribed liquidity in their accounts.
Private Lenders Top the Penalty Charts
Private sector lenders recorded the highest collection of funds under non-maintenance penalties. HDFC Bank emerged at the top of the tally, collecting ₹5,670 crore from account holders who fell below the minimum balance threshold. Axis Bank ranked second in total penalty collections, gathering ₹3,787 crore from its customer base. Among public sector institutions, Bank of Baroda registered the highest penalty receipts, collecting approximately ₹2,028 crore during the evaluated period.
State-Run Banks and Key Tally Breakdowns
Public sector lenders also accounted for substantial penalty revenues over the reported fiscal years. Punjab National Bank took the fourth spot overall, recovering ₹1,896 crore from customers unable to maintain mandatory balances. Indian Bank secured the fifth position by collecting ₹1,777 crore in charges between FY 2021-22 and FY 2025-26. For public sector banks, the submitted data spans five fiscal years from FY 2021-22 to FY 2025-26, whereas the statistics for private sector lenders cover four fiscal years from FY 2022-23 to FY 2025-26.
Parliamentary Disclosure of Financial Data
The detailed figures were presented in a written response to the Rajya Sabha on July 28. Minister of State for Finance Pankaj Chaudhary outlined the exact quantum of charges collected by state-owned and private commercial institutions for MAB non-compliance. The disclosure further highlighted that public sector lenders actively re-evaluated their service fee frameworks to make everyday banking functions more accessible and customer-friendly for the general public.
Policy Shift Across Public Sector Lenders
A major structural relief measure has been adopted by state-owned banks regarding account maintenance fees. Out of the 12 active public sector banks in the country, 10 have completely done away with penalty charges on standard savings accounts for failing to keep a minimum average balance. The remaining two public sector institutions have rationalized their fee structures in accordance with commercial necessities and policies approved by their respective boards, easing the financial strain on retail depositors.
