Banks Earn Rs 19,000 Cr From Minimum Balance Charges In 3 Yrs

2026-03-18 03:08:50

(MENAFN- Kashmir Observer) Srinagar- Banks across India have collected nearly Rs 19,000 crore over the past three years from customers for not maintaining the prescribed minimum balance in their accounts, sparking fresh concerns over the burden such charges place on small account holders.

Data shared by the Finance Ministry in Parliament shows that a total of Rs 19,083 crore was collected as penalties during this period. Of this, public sector banks accounted for Rs 8,092.83 crore, while private banks contributed a larger share of the total.

The issue was raised in Parliament, where lawmakers flagged the disproportionate impact of these charges on low-income groups. A member pointed out that such penalties are often borne by those with limited savings rather than affluent customers.

Highlighting the ground-level implications, it was noted that even minor shortfalls in account balances can attract penalties, affecting farmers, pensioners and daily wage earners who rely on their accounts for essential expenses.

The debate has also brought into focus the broader question of financial inclusion. Critics argue that banking systems meant to safeguard small savings should not penalise customers for maintaining low balances, especially when accounts are primarily used for basic financial security.

There have been calls to review or withdraw minimum balance requirements to ease the burden on vulnerable sections. However, under existing regulations, banks are permitted to set their own minimum balance thresholds and levy charges for non-compliance.

At the same time, zero-balance accounts, such as Basic Savings Bank Deposit Accounts, remain exempt from such penalties.

Read Also Govt to Constitute High-level Panel on Banking Soon: FM J&K Okays SCARD Bank Liquidation; Staff Uncertain

The issue of minimum balance charges has surfaced repeatedly in policy discussions, with banks maintaining that such fees help cover operational costs, while critics contend that they place undue pressure on those least able to afford them.

The latest disclosures have once again drawn attention to the need for balancing banking practices with the goals of accessibility and inclusion, particularly for customers who depend on basic banking services for everyday needs

MENAFN18032026000215011059ID1110879934

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.