**Executive Summary**
The document addresses Unstarred Question No. 1495 in Lok Sabha concerning charges imposed by banks for minimum balance shortfalls, ATM usage, and SMS alerts. It details the government's and RBI's stance on regulating these charges, including the availability of zero-balance accounts and oversight on bank practices. The response includes figures on revenue earned by Public Sector Banks (PSBs) from such charges over the last five financial years.
**Key Points / Main Content**
* **Bank Charges Governance:**
* Service charges, including those for non-maintenance of minimum balance, ATM usage, and SMS alerts, are governed by banks' board-approved policies and RBI instructions.
* RBI mandates that such charges must be reasonable, transparent, and aligned with the cost of providing the services.
* **Zero-Balance Accounts:**
* Banks offer zero-balance savings accounts, including Basic Savings Bank Deposit Accounts (BSBDAs) and Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts.
* These accounts do not require minimum balance maintenance and provide basic banking services (deposits, withdrawals, ATM access) free of charge.
* **Public Sector Banks' Actions:**
* PSBs have waived or rationalised minimum balance charges in regular savings bank accounts, aligned with their board-approved policies.
* **Revenue from Penalties and Service Charges (PSBs only):**
* RBI does not maintain comprehensive data on revenue earned by both public and private sector banks.
* Based on inputs from PSBs, the revenue earned through penalties and service charges is as follows (in Rs. Crore):
* **Minimum Balance Shortfall:** 1,637.41 (2020-21), 1,805.75 (2021-22), 2,294.68 (2022-23), 2,909.10 (2023-24), 2,889.05 (2024-25)
* **ATM Usage:** -416.68 (2020-21), -507.49 (2021-22), -451.46 (2022-23), -594.12 (2023-24), -647.32 (2024-25)
* **SMS Alerts:** 1,044.32 (2020-21), 1,282.03 (2021-22), 1,193.19 (2022-23), 977.28 (2023-24), 1,218.60 (2024-25)
* **Government & RBI Initiatives:**
* To protect customers from unreasonable banking charges, zero-balance accounts and free limits for basic banking services are available.
* RBI exercises supervisory oversight over banks' practices.
* The Government and RBI are expanding digital banking infrastructure and financial literacy/inclusion initiatives.
**Impact Analysis**
**Stakeholder: Banks (Public and Private Sector)**
* **Impact:** Must ensure service charges are reasonable, transparent, and aligned with the cost of services, according to RBI guidelines and board-approved policies.
* **Action Required:** Adhere to RBI's supervisory oversight and participate in Government and RBI initiatives to promote affordable and inclusive access to banking services.
**Stakeholder: Account Holders/Common Customers**
* **Impact:** Protected from unreasonable banking charges through zero-balance accounts and free limits for basic banking services.
* **Action Required:** Be aware of available options such as BSBDAs and PMJDY accounts and utilize digital banking and financial literacy resources.
**Stakeholder: Reserve Bank of India (RBI)**
* **Impact:** Responsible for ensuring banks adhere to guidelines on service charges and promoting affordable banking access.
* **Action Required:** Continue supervisory oversight of banks' practices and collaborate with the government on financial inclusion initiatives.
**Stakeholder: Government of India**
* **Impact:** Responsible for protecting common customers from unreasonable banking charges and ensuring affordable banking access.
* **Action Required:** Collaborate with RBI and banks to expand digital banking infrastructure and financial literacy initiatives.
Key Entities Referenced
Reserve Bank of India (RBI): The central bank whose instructions govern banks' service charges and which exercises supervisory oversight over banking practices.
Pradhan Mantri Jan Dhan Yojana (PMJDY): A scheme providing accounts that do not require maintenance of any minimum balance and provides basic banking services.
Basic Savings Bank Deposit Accounts (BSBDAs): Zero-balance savings accounts offered by banks.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. 1495
Answered on Monday, February 9, 2026/Magha 20, 1947 (Saka)
Penalty for not maintaining Minimum Balance
1495. SMT. MALA ROY:
DR. M K VISHNU PRASAD:
Will the Minister of FINANCE be pleased to state:
(a) whether the Government is aware that some Public Sector Banks/ Private Sector Banks are
imposing excessive charges on minimum balance shortfall, ATM usage and SMS alerts;
(b) if so, the details thereof;
(c) the details of revenue earned by Public and Private Sector Banks through penalties and service
charges during the last five years;
(d) whether the Government proposes to regulate or cap unreasonable banking charges to
protect common customers; and
(e) if so, the details thereof?
ANSWER
THE MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) and (b): The levy of service charges by banks, including charges relating to non-maintenance
of minimum balance in savings bank accounts, ATM transactions beyond the prescribed free
limits and for SMS alerts is governed by banks’ Board-approved policies and the extant
instructions of the Reserve Bank of India (RBI), which require that such charges have to be
reasonable, transparent, and aligned with the cost of providing the services.
Further, banks offer zero-balance savings accounts, including Basic Savings Bank Deposit
Accounts (BSBDAs) and accounts opened under the Pradhan Mantri Jan Dhan Yojana
(PMJDY), which do not require maintenance of any minimum balance and provide basic banking
services such as deposits, withdrawals, and ATM access free of charge, without levy of penal
charges for non-maintenance of minimum balance.Public Sector Banks (PSBs) have waived or rationalised minimum balance charges in regular
savings bank accounts in accordance with their Board-approved policies and commercial
considerations to enhance customer centricity.
(c): RBI has informed that it does not maintain data relating to revenue earned by public and
private sector banks from penalties and service charges. However, based on inputs received from
PSBs, the revenue earned through penalties and service charges during the last five years is as
below: —
(Amount in Rs. Crore)
FY Minimum Balance ATM Usage* SMS alerts
Short fall
2020-21 1,637.41 -416.68 1,044.32
2021-22 1,805.75 -507.49 1,282.03
2022-23 2,294.68 -451.46 1,193.19
2023-24 2,909.10 -594.12 977.28
2024-25 2,889.05 -647.32 1,218.60
*income earned by bank on account of ATM cash withdrawal charges collected from customers/ interchange fee earned from other banks net-off
expenses in the form of interchange fees paid to other banks
(d) and (e): To protect the common customers from unreasonable banking charges and
addressing their interests, zero-balance accounts have been made available and free limits for
basic banking services have been prescribed. RBI exercises supervisory oversight over banks’
practices, and the Government, in consultation with RBI, continues to engage with banks
through expansion of digital banking infrastructure and financial literacy / financial inclusion
initiatives to promote affordable and inclusive access to banking services to all.
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