Savings Account Holders have paid nearly Rs 10,000 crore to banks in the last three years in penalties for not maintaining the minimum balance in their savings accounts. As a penalty for non-maintenance of the minimum balance, 18 PSU banks have collected Rs 6,155 crore in the last three years, whereas four major private sector banks have collected Rs 3,567 crore in the same duration, Anurag Thakur, MoS, Ministry of Finance, said in reply to a Rajya Sabha query. Banks do not charge Basic Savings Bank Deposit accounts (BSBD) and Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts for non-maintenance of minimum balance. But for other accounts, banks are permitted to levy charges on various services rendered by them.
India’s largest bank SBI re-introduced the penalty on non-maintenance of minimum balance from April 2017 and collected over Rs 2,400 Crore as Minimum Balance Penalty in FY 2017-18. SBI registered a net profit of Rs 862 crore in FY 2018-19 after being in the loss in the previous two years. Higher interest income is one of the major factors to push SBI into profit.
Savings account holders in HDFC Bank, ICICI Bank, Kotak Mahindra Bank, and IndusInd Bank have minimum balance requirements of up to Rs 10,000, whereas Punjab National Bank and State Bank of India have minimum balance requirement of up to Rs 2,000 and Rs 3,000 respectively. Banks keep different minimum balance requirement for the savings account opened in different parts of the country. MAB (monthly average balance) penalty charges differ for the branches in metro, urban, semi-urban and rural areas. MAB is calculated by adding the closing-day balance of all the days and further dividing it by the total number of days.
RBI’s Circular on “Customer Service in Banks” has authorised banks to charge their services but has also asked to ensure that the charges are reasonable and not out of line with the average cost of providing the services.