The country’s public sector banks excluding the State Bank of India earned penalties amounting to Rs 2,331 crore in the financial year 2024 from account holders who failed to maintain the minimum balance in their savings accounts, according to data from the Ministry of Finance. This figure marks a rise of 25.63% compared to the Rs 1,855 crore collected in financial year 2023.
Over the past three years, these 11 public sector banks have generated Rs 5,614 crore through penalties imposed on customers for not fulfilling the minimum balance criterion. Among them, Punjab National Bank topped the list with penalties of Rs 633 crore, followed by Bank of Baroda at Rs 386 crore and Indian Bank at Rs 369 crore.
While guidelines allow basic banking services to be provided free of cost under basic savings accounts without a minimum balance requirement, other bank accounts allow penalties to be levied according to the board-approved policies of each institution. Customers are typically notified in advance through SMS or email if their account balance dips below the required level, and have a one month period to restore the minimum before penalties are applied.
The amounts collected serve as an important revenue stream for banks, though financial inclusion norms aim to promote access to banking irrespective of account balances. With growing digitalization and fintech alternatives however, traditional banks still leverage minimum balance rules to boost savings and maintain profitability. While customers now have more options, staying aware of account conditions remains important to avoid unexpected charges.
