Banks Collected ₹7,086 Crore as Minimum Balance Penalties in FY26: Government

Banks in India collected ₹7,086.63 crore as penalties for non-maintenance of the Minimum Average Balance (MAB) in savings and current accounts during FY 2025–26, according to information shared by the Ministry of Finance in the Rajya Sabha.

Minister of State for Finance Pankaj Chaudhary, in a written reply, informed Parliament that private sector banks collected ₹4,948.71 crore, while public sector banks (PSBs) collected ₹2,137.92 crore as minimum balance charges during the financial year.

Private Sector Banks Collected Nearly 70% of Total Charges

Private sector banks accounted for nearly 70% of the total minimum balance penalties collected during FY26.

Top Private Banks by Minimum Balance Charges

Together, HDFC Bank and Axis Bank accounted for nearly 58% of the total charges collected by private sector banks.

Public Sector Banks (PSBs) Collection

Public sector banks collected ₹2,137.92 crore during FY26.

Top PSBs by Minimum Balance Charges

Note: SBI’s collection pertains only to current accounts, as the bank waived minimum balance charges on savings accounts in March 2020.

Most PSBs Have Discontinued Savings Account Penalties

The government informed Parliament that:

• 10 out of 12 Public Sector Banks have completely discontinued penal charges for non-maintenance of the minimum average balance in savings accounts.
• The remaining two PSBs have rationalized such charges based on their board-approved policies and commercial considerations.

Are Jan Dhan and Zero-Balance Accounts Exempt?

Yes.

The government clarified that Basic Savings Bank Deposit Accounts (BSBDAs), including accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY), are completely exempt from minimum balance requirements.

Features of BSBDAs

• No minimum balance requirement.
• No penalty for non-maintenance of balance.
• Free basic banking services.
• Cash deposits and withdrawals.
• ATM/Debit Card facility.

Currently, around 730 million BSBDAs, including PMJDY accounts, are exempt from minimum balance penalties.

RBI Guidelines on Minimum Balance Charges

According to the Reserve Bank of India (RBI), banks are permitted to levy minimum balance charges on savings and current accounts, provided they follow:

• Board-approved policies.
• Transparent and reasonable pricing.
• Charges proportionate to the cost of providing banking services.

Banks must also:

• Inform customers through SMS, email, letters, or other communication channels.
• Provide sufficient time for customers to restore the required minimum balance before imposing penalties.

Financial Health of Public Sector Banks Improves

Replying to another question in the Rajya Sabha, Minister Pankaj Chaudhary stated that the financial position of Public Sector Banks has improved considerably.

Key Improvements

• Healthy balance sheets.
• Record profits.
• Gross Non-Performing Assets (GNPAs) at multi-decadal lows.
• Strong credit growth across sectors.

Government Introduces ECLGS 5.0

The Minister also informed Parliament that the Government launched Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 in May 2026 to help businesses affected by the West Asia crisis.

Key Features of ECLGS 5.0

• 100% guarantee coverage for MSMEs.
• 90% guarantee coverage for non-MSMEs and scheduled passenger airlines.
• Credit support of up to ₹2.55 trillion.
• ₹5,000 crore specifically earmarked for the scheduled passenger airline sector.
• Implemented through the National Credit Guarantee Trustee Company Ltd. (NCGTC).