How Much 11 PSBs Collected as Penalty for Low Bank Balances In FY21-FY25
Between FY21 and FY25, eleven public sector banks (PSBs) in India collected nearly ₹9,000 crore as penalty charges from customers who failed to maintain the minimum balance in their savings accounts. The data was shared by the Finance Ministry in the Rajya Sabha, in response to a question by Congress President Mallikarjun Kharge. The move has reignited debate over the fairness of such penalties, especially given their impact on customers in semi-urban and rural areas.
Key Banks that Ended Charges
Some banks charged customers for failing to maintain a monthly minimum balance, while others imposed penalties on a quarterly basis.
Certain categories of accounts were exempted from maintaining a minimum balance, including,
In his reply, Minister of State for Finance Pankaj Chaudhary said that the Department of Financial Services (DFS) had advised banks to rationalise penal charges, with particular emphasis on providing relief to customers in semi-urban and rural areas. Seven out of 11 PSBs have implemented this advisory. The remaining four PSBs are expected to follow soon.
The Reserve Bank of India (RBI) has framed rules regarding the levy of such charges. Banks may fix penal charges as per their Board-approved policies. The charges must be a fixed percentage calculated on the difference between the actual balance and the required minimum balance, as agreed at the time of account opening. RBI also stressed the importance of ensuring fair customer service while imposing such penalties.
The imposition of penalties has been controversial,
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