Indian banks, both public and private, have collected nearly Rs 7,100 crore as penalties from customers for failing to maintain minimum average balance (MAB) in their accounts in financial year 2025-26. This is up from around Rs 6,800 crore in the preceding year, government has told Parliament.
Nearly 70% of the charges, adding up to Rs 4,948 crore, were collected by private banks, which saw MAB charges rise by 17% in FY26.
Responding to a query in Rajya Sabha, in a written reply, Pankaj Chaudhary, Minister of State (MoS), Ministry of Finance, said that HDFC Bank, Axis Bank and Bank of Baroda were the top collectors of the highest penalty charges from their customers for non-maintenance of the MAB.
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.
Punjab National Bank is in the fourth position with Rs 1,896 crore penalty collection, while Indian Bank has Rs 1,777 crore penalty collected from customers.
What is a Minimum Average Balance?
A Minimum Average Balance (MAB), or Average Monthly Balance (AMB), is the average amount of money you must keep in your bank account over a month. It is calculated by adding up your daily closing balance for every single day and dividing that total by the number of days in the month.
To calculate your AMB, the bank takes the sum of the closing balances for all days in a month and divides it by the number of days in the month.
If the average is less than the AMB, the bank will notify you in 2 months that you maintain the minimum balance to avoid the non-maintenance charges. This charge will be directly deducted from your Savings Account funds.
Finance Ministry said banks offer zero-balance savings accounts through Basic Savings Bank Deposit Accounts (BSBDAs), including accounts opened under the Pradhan Mantri Jan Dhan Yojana.
These accounts are meant to improve financial inclusion by providing basic banking services to unbanked, vulnerable and small depositors.
Since these accounts do not require customers to maintain a minimum balance, no penalty is charged for the non-maintenance of balance. They also provide basic banking services such as deposits, withdrawals and ATM access without any penal charges.
