Banks Collected Rs 28000 Crore As Penalties For Low Balances
HDFC Bank, Axis Bank were the top collectors of the penalty charges from their customers for non-maintenance of minimum balance followed by Bank of Baroda
Mumbai: Banks collected nearly Rs 28000 crore as penalties for non-maintenance of minimum average balance (MAB) in accounts during the past five years as per a written reply given by Minister of State for Finance Pankaj Chaudhary in the Rajya Sabha. Bulk of the penalties collected were by private sector lenders at ₹15,939.62 crore over four financial years for which data is available while public sector banks (PSBs) account for ₹12,033.39 crore over five financial years,
Interestingly, HDFC Bank, Axis Bank were the top collectors of the penalty charges from their customers for non-maintenance of minimum balance followed by Bank of Baroda.
HDFC Bank collected around Rs 5,670 crore penalty, Axis Bank collected Rs 3,787 crore and Bank of Baroda collected nearly Rs 2,028 crore from its customers as penalty for failing to maintain the minimum balance dwarfing the amount collected by State Bank of India at Rs 1600.77.
The government also said that ten of the country's 12 PSBs have discontinued penal charges on savings accounts to promote customer-centric and inclusive banking while two banks have rationalised such charges, in accordance with their Board‑approved policies and commercial considerations.
Chaudhary also clarified for SBI the collection amount relate only to current accounts, as SBI has completely waived off penal charges for non-maintenance of minimum average balance in savings accounts since March 2020.
The government said that Basic Savings Bank Deposit Accounts (BSBDAs), which includes those set up under the Pradhan Mantri Jan Dhan Yojana (PMJDY), are not obliged to keep a minimum balance. These accounts come with basic banking facilities such as deposits, withdrawals and ATM access at no cost. As per the government, close to 73 crore BSBDAs, PMJDY accounts included, are presently exempt from any fine for failing to maintain the minimum balance.
