India’s largest bank State Bank of India completely waived off penal charges for not maintaining minimum balance in saving accounts since March 2020
According to data in the written response by Finance Minister Nirmala Sitharaman, HDFC Bank emerged as the top earner with over ₹3,800 crore in 3 years, followed by Axis Bank and ICICI Bank with over ₹2,700 crore and ₹1,200 crore respectively. Among the public sector banks, PNB was on top in terms of total during three years with over ₹1,500 crore followed by Bank of Baroda (over ₹1,200 crore) and Indian bank (over 1,100 crore).
India’s largest bank State Bank of India completely waived off penal charges for not maintaining minimum balance in saving accounts since March 2020. Following that many of other public sector bank such as Punjab National Bank and Canara Bank also removed such charges last year. However, they do have changes for current account. At the same time, private sector banks are still charging for not maintaining minimum balance.
For example, HDFC Bank stipulates average monthly balance for metro and urban branches at ₹10,000 or FD of ₹1 lakh for minimum 1 year 1 day period; in case of semi Urban, it is ₹5,000 or FD of ₹50,000 for minimum 1 year 1 day period and in rural area, it is Rs ₹2,500 or FD of ₹25,000 for minimum 1 year 1 day period. Non-maintenance charge would be 6 per cent of the shortfall from the average balance requirement or ₹600, whichever is lower.
Meanwhile, in her written reply, Sitharaman said banks offer zero-balance savings accounts facility, better known as basic savings bank deposit accounts (BSBDAs) including the accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY). These accounts do not require maintenance of any minimum balance. Accordingly, “approximately 72 crore BSBDAs, including, PMJDY accounts are not subject to any penal charges for non-maintenance of minimum balance,” she said.
However, for accounts other than BSBDAs including PMJDY accounts, banks may levy charges for non-maintenance of minimum monthly average balance (MAB) in accordance with their board-approved policies and the extant instructions of the Reserve Bank of India (RBI), she said.
Further she added that an amount of over ₹8,000 crore collected over the last three financial years constitutes approximately 0.23 per cent 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.”
She also mentioned that in cases of non-maintenance of the agreed minimum balance in bank accounts, banks have been advised by RBI to notify customers through SMS, email, letter or other appropriate means. Customers are generally provided time to restore the required minimum balance before penal charges are applied as per extant regulatory guidelines.
Published on March 9, 2026