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State Bank of India re-introduced the minimum balance penalty on 1 April 2017. Photo: Pradeep Gaur/Mint
State Bank of India re-introduced the minimum balance penalty on 1 April 2017. Photo: Pradeep Gaur/Mint

Banks collect ₹ 5,000 crore in FY18 as minimum balance penalty

State Bank of India (SBI) accounted for nearly half the amount collected as minimum balance penalty in 2017-18

New Delhi: Twenty-one public sector banks and three major private sector lenders collected 5,000 crore from customers as minimum balance penalty in 2017-18, according to banking data. State Bank of India, which suffered a staggering net loss of 6,547 crore during 2017-18, led the pack in penalising its customers for not maintaining minimum balance. It accounted for nearly half the amount collected as minimum balance penalty.

After SBI, the largest amount of minimum balance penalty during 2017-18 was collected by HDFC Bank Ltd. It charged its customers 590.84 crore, which is lower than 619.39 crore in 2016-17, the data revealed.

Axis Bank collected 530.12 crore in the last fiscal while ICICI Bank charged 317.6 crore.

SBI was charging the penalty on failure to maintain monthly average balance requirement till 2012 and re-introduced it on 1 April 2017 and reduced the charges with effect from 1 October 2017.

According to norms set by the Reserve Bank of India (RBI), banks are permitted to levy service/miscellaneous charges. Customers opening accounts under Basic Savings Bank Deposit (BSBD) scheme as well as Pradhan Mantri Jan Dhan Yojna are not required to maintain any minimum balance.

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