Indian banks mopped up as much as Rs 19,083 crore in penalties over the past three years because customers failed to maintain minimum balance requirements in their accounts. The figure was shared on LinkedIn by CA Kanan Bahl, who raised concerns that it was “extremely unfair” that banks were making money at scale due to people's financial crunch.
While the State Bank of India and Punjab National Bank, two prominent public sector banks, have stopped charging penalties for failing to maintain minimum balance, they still earned significant amounts from such charges in earlier periods.
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“Please note that the SBI has not been charging minimum balance penalties on savings bank accounts for a very long time. However, it still collected Rs 932 crore from such penalties levied on current accounts. Even PNB has discontinued charging such penalties w.e.f. July 1, 2025,” Bahl said.
Minimum balance is the lowest amount that a customer must maintain in a savings account to avoid penalties. It varies by bank, account type and location. Typically, rural accounts may need about Rs 500, while urban and metro accounts, especially in private banks, can require Rs 10,000 to Rs 50,000 or more minimum average monthly balance to avoid penalties.
Citing data on the penalties from RupeeTool, an online platform, Bahl said: “The fee should either be scrapped or reduced significantly.”
According to RupeeTool, private lenders such as HDFC Bank collected over half of the total penalties in the last three years at Rs 10,991 crore. On the other hand, public sector banks collected as much as Rs 8,092 crore from these penalties.
Of the nearly more than a dozen banks considered, the data showed that HDFC Bank topped the chart at Rs 3,871 crore collected in penalties in the last three years. Axis Bank, ICICI Bank, Bank of Baroda were among other lenders with penalty collections exceeding Rs 1,000 crore.
Despite discontinuing the practice from July 2025, Punjab National Bank collected Rs 1,557 crore during the overall period, RupeeTool reported.
As the post gained traction, many people agreed with Bahl's sentiment. “The scale of these collections points toward bank reliance on regressive fee structures,” a user said.
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Echoing similar sentiments, another said, “Charges may be justified, but relying heavily on low balance penalties raises concerns. It mostly impacts those who can least afford it.”
The data shows what may seem like a small mistake can gradually reduce your savings. Minimum balance penalties can add to people's financial burden, particularly if they are already under fiscal stress due to other reasons. Hence, it is important to be aware about the requirements of your bank account over such policies before making long-term commitments.
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