Private Banks' Minimum Balance Fee Haul Tops Rs 4,900 Crore in FY26

Private banks in India collected a staggering Rs 4,948.71 crore from customers during the financial year 2025-26 as charges for not maintaining the required minimum average balance in savings and current accounts, government data presented in Parliament on Tuesday showed.

The figure, shared by Minister of State for Finance Pankaj Chaudhary in a Rajya Sabha reply, is more than double the Rs 2,137.92 crore gathered by public sector banks (PSBs) over the same period. The numbers, sourced from the Reserve Bank of India, highlight a stark disparity in how the two banking segments earn from account-keeping fees.

HDFC Bank led the pack among private lenders with Rs 1,798.14 crore in such collections, followed by Axis Bank at Rs 1,081.33 crore. The two together accounted for nearly 58% of the total minimum balance charges that 19 private banks levied on their customers.

The minister clarified that no penal charges are applied to Basic Savings Bank Deposit Accounts—including Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts—which typically do not require a minimum balance. This exemption shields millions of low-income account holders, but for many others, the fees remain a significant recurring cost.

Why HDFC and Axis Dominate the Charges

The Revenue Numbers in Context

For private banks, fee income from insufficient balances now represents a sizeable line item. The Rs 4,949 crore figure, while just a fraction of their total non-interest income, adds directly to their bottom line and reflects the high volume of accounts they service. In contrast, public sector banks—with vast low-cost deposit bases and a larger share of basic accounts—took in less than half that amount, suggesting that their minimum balance requirements may be lower or less strictly enforced.

The HDFC–Axis Dominance

HDFC Bank's near Rs 1,800 crore collection stands out. With a massive retail customer base and a reputation for aggressive sales, the bank likely has a significant number of accounts where customers sometimes dip below the stipulated threshold. Axis Bank's Rs 1,081 crore also indicates that minimum balance penalties are an important component of its fee structure. However, the data does not reveal whether these fees disproportionately hit lower-income segments or reflect accounts with higher balance requirements and steeper penalties.

What the Exemptions Mean

The explicit exclusion of Basic Savings Bank Deposit Accounts—especially Jan Dhan accounts—means that the financially most vulnerable are protected from these penalties by design. Yet, a large urban and semi-urban population using regular savings accounts remains exposed. The information gap is substantial: many customers may not even be aware of the exact threshold required or the charges when they fall short, making the fees a silent wealth transfer.

How to Shield Your Savings from Minimum Balance Penalties

For individuals worried about minimum balance penalties, the following concrete steps can help:

  • Switch to a zero-balance account. If your banking needs are basic, consider opening a Basic Savings Bank Deposit Account or a Jan Dhan account—legally, no penal charges apply. These accounts are available at most banks and are designed for those who cannot maintain a high minimum balance.
  • Compare public sector bank offerings. PSBs collectively collected less than half of private banks' fee income, suggesting that their minimum balance thresholds may be lower. Current and savings accounts at SBI or other nationalised banks often have more modest requirements, cutting the risk of penalties.
  • Check your bank's specific schedule of charges. Minimum balance rules vary—some banks calculate it monthly, others quarterly, and the penalty tiers differ. Knowing your bank's exact threshold and fee structure can help you keep the required balance at all times.
  • Set up alerts or auto-sweeps. Many banking apps allow you to receive alerts when your balance approaches the minimum, and some offer a sweep-in facility from a linked deposit to avoid falling short. While not free of cost, they can prevent repeated penalties.