How Much Did Banks Earn From Minimum Balance Charges?
Indian banks, both public and private, collected nearly INR 7,100 crore as penalties from customers for failing to maintain the minimum average balance (MAB) in their accounts in financial year 2025-26, the government told Parliament. This marks an increase from around Rs 6,800 crore collected in the preceding financial year.
Indian banks, both public and private, collected nearly Rs 7,100 crore as penalties from customers for failing to maintain the minimum average balance (MAB) in their accounts in financial year 2025-26, the government told Parliament. This marks an increase from around Rs 6,800 crore collected in the preceding financial year.
Private Banks Account For Bulk Of The Penalty
Nearly 70 percent of the total charges, amounting to Rs 4,948 crore, were collected by private banks, which saw their MAB penalty collections rise by 17 percent in FY26 compared to the previous year.
Responding to a query in the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary said in a written reply that HDFC Bank, Axis Bank and Bank of Baroda were the top collectors of penalty charges from customers for non-maintenance of the minimum balance. Bank of Baroda Clarifies Security Incident After Alleged 1TB Data Leak Claims on Dark Web.
Bank-Wise Breakdown Of Penalty Collections
According to the data shared in Parliament, HDFC Bank collected around Rs 5,670 crore as penalty, followed by Axis Bank at Rs 3,787 crore and Bank of Baroda at nearly Rs 2,028 crore.
Punjab National Bank stood fourth with Rs 1,896 crore in penalty collections, while Indian Bank collected Rs 1,777 crore from customers for failing to maintain the minimum balance requirement. Bank of Baroda Breach: Experts Explain How Email-Driven Cyberattacks Can Be Prevented.
What Is A Minimum Average Balance
A Minimum Average Balance (MAB), also referred to as Average Monthly Balance (AMB), is the average amount of money account holders are required to maintain in their bank account over a month. It is calculated by adding up the daily closing balance for every day of the month and dividing that total by the number of days in the month.
If the average falls short of the required MAB, the bank is expected to notify the customer within two months to maintain the minimum balance and avoid non-maintenance charges. These charges are directly deducted from the customer's savings account.
Zero-Balance Accounts Exempt From Penalty
The Finance Ministry said banks also offer zero-balance savings accounts through Basic Savings Bank Deposit Accounts (BSBDAs), including accounts opened under the Pradhan Mantri Jan Dhan Yojana.
These accounts are designed to improve financial inclusion by extending basic banking services to unbanked, vulnerable and small depositors. Since such accounts do not require customers to maintain a minimum balance, no penalty is levied for non-maintenance. They also offer basic banking services, including deposits, withdrawals and ATM access, without any penal charges.
(The above story first appeared on LatestLY on Jul 30, 2026 07:23 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).