Banks made ₹8,092 crore: Are you paying minimum balance penalties too?

If you hold a regular savings or current account, you may be part of the millions of customers who have paid banks for failing to maintain the minimum balance.

According to Finance Minister Nirmala Sitharaman, public sector banks collected ₹8,092.83 crore in penalties between FY23 and FY25.

“The amount of ₹8,092.83 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,” the minister said in a written reply to the Lok Sabha.

Who pays and who doesn’t

While millions of regular account holders have paid these penalties, 72 crore Basic Savings Bank Deposit Accounts (BSBDAs), including those opened under the Pradhan Mantri Jan Dhan Yojana, are completely exempt from minimum balance charges.

“Approximately 72 crore BSBDAs, including PMJDY accounts, are not subject to any penal charges for non-maintenance of minimum balance,” Sitharaman said.

These zero-balance accounts were introduced to promote financial inclusion, giving unbanked and vulnerable sections access to basic banking services. Account holders can deposit, withdraw, and use ATM facilities without worrying about penalties.

“The account holders are provided basic banking services such as deposits, withdrawals and ATM access free of charge, without levy of any penal charges,” the minister added.

How banks handle other accounts

For regular savings or current accounts, banks may levy charges if the Minimum Average Balance (MAB) is not maintained.

Banks reducing penalties

“SBI had completely waived off penal charges for non-maintenance of minimum MAB in savings accounts since March 2020. In 2025, nine PSBs have waived off such charges and two rationalised minimum balance charges,” the minister said.

You don't have to worry about the MAB requirement if you have a Jan Dhan or Basic Savings account. Check your minimum balance requirement, though, if you use a regular savings or current account. If you don't fulfill it, you may still be penalized hundreds or even thousands of rupees annually.

Keeping track of your balance and choosing zero-balance accounts where possible can save you money and make banking stress-free.