Executive Summary:
This document addresses Lok Sabha Unstarred Question No. 3539 regarding waivers on minimum balance charges by Public Sector Banks (PSBs). It clarifies the policy framework set by the Reserve Bank of India (RBI) and details the actions taken by PSBs regarding minimum balance charges, financial inclusion, and customer retention strategies. The information was provided in response to questions raised on August 11, 2025.
Key Points / Main Content:
Minimum Balance Charges:
* Banks levy minimum balance charges as per their board-approved policy and RBI guidelines.
* RBI permits service charges for non-maintenance of minimum balance, provided they are reasonable.
* Banks can remove or lower charges based on their board-approved policy and commercial considerations.
Financial Inclusion:
* RBI advises banks to offer Basic Savings Bank Deposit Accounts (BSBDA) with no minimum balance requirement.
* BSBDA accounts provide basic banking facilities (deposits, withdrawals, ATM cards) without charges.
* Accounts are also opened under Pradhan Mantri Jan Dhan Yojana without minimum balance requirements.
PSB Actions:
* Most PSBs have removed minimum balance charges in general savings accounts or have rationalized them.
* These actions are part of their business strategy, aiming for growth in deposits, among other benefits.
Customer Retention Strategies:
* PSBs employ a multi-pronged strategy to attract CASA deposits and retain customers:
* Product innovation and segment-specific offerings using analytics.
* Seamless customer onboarding using technology like Video KYC and digital KYC verification.
* Strategic approach for deposit retention and new deposit acquisition with digitally enabled offerings.
* Financial outreach programs and business campaigns.
* Enhanced mobile and Internet banking access with more services, user-friendly features, and regional languages.
Impact Analysis:
Public Sector Banks (PSBs):
* Impact: PSBs have the flexibility to decide on minimum balance charges based on board-approved policies, balancing financial inclusion objectives with commercial wisdom. They are expected to implement strategies for CASA deposit growth and customer retention.
* Action Required: PSBs must adhere to RBI guidelines, formulate board-approved policies regarding minimum balance charges, and implement customer retention strategies.
Savings Account Holders:
* Impact: Savers may benefit from the removal or rationalization of minimum balance charges in general savings accounts. The availability of BSBDA and Pradhan Mantri Jan Dhan Yojana accounts ensures access to basic banking services without minimum balance requirements.
* Action Required: Account holders should be aware of the specific policies of their respective banks regarding minimum balance charges and consider opening a BSBDA or Pradhan Mantri Jan Dhan Yojana account if they prefer not to maintain a minimum balance.
Reserve Bank of India (RBI):
* Impact: RBI's role is to provide guidelines and advise banks on matters related to minimum balance charges and financial inclusion.
* Action Required: RBI needs to continue monitoring the implementation of its guidelines by banks and ensure that the charges levied are reasonable.
Key Entities Referenced
Ministry of Finance: The Indian government ministry responsible for financial matters.
Department of Financial Services: A department within the Ministry of Finance, Government of India.
Lok Sabha: The lower house of the Parliament of India.
Reserve Bank of India: India's central bank, responsible for regulating the banking system.
Public Sector Banks: Banks in India that are majority-owned by the Government of India.
Pradhan Mantri Jan Dhan Yojana: A National Mission for Financial Inclusion to ensure access to financial services, namely banking.
CASA Current Account and Saving Account: A type of bank deposit account.
Basic Savings Bank Deposit Account: A savings account with simplified procedures and minimal charges, aimed at financial inclusion.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. 3539
ANSWERED ON MONDAY, AUGUST 11, 2025/ SRAVANA 20, 1947 (SAKA)
WAIVERS ON MINIMUM BALANCE CHARGES
3539. Shri Dhairyasheel Sambhajirao Mane:
Shri Chavan Ravindra Vasantrao:
Shri Manish Jaiswal:
Shri Sudheer Gupta:
Will the Minister of FINANCE be pleased to state:
(a) whether Public Sector Banks (PSBs) have recently announced or implemented waivers
on minimum balance fees/charges to encourage savings accountholders to maintain their
accounts with the banks and if so, the details thereof;
(b) the rationale behind the decision and the expected impact on financial inclusion and
customer retention;
(c) whether the Government is providing/proposes to provide any financial support or
incentives to PSBs to implement such measures and if so, the details thereof;
(d) the details of estimated financial impact on the banks due to waiver of these fees/charges;
and
(e) the details of other measures taken/being taken by the Reserve Bank of India and
Public Sector Banks to maintain CASA (Current Account and Saving Account) ratio and
retain customers?
ANSWER
THE MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (e): The minimum balance fees/charges in savings accounts of customers are levied by
the banks as per their board approved policy and within the guidelines issued by the Reserve
Bank of India (RBI). The RBI circulars dated, 20.11.2014 and 1.7.2015 permit banks to levy
service charges, including, inter alia, for non-maintenance of minimum balance in savings
accounts, subject to the condition that such charges must be reasonable and not out of line
with the average cost of providing the services. Banks may remove the charges or charge
lower than their service cost, depending upon their board approved policy and commercial
wisdom.As part of financial inclusion objectives, RBI has advised the banks to offer a ‘Basic Savings
Bank Deposit Account (BSBDA)’ to their customers, subject to certain conditions, wherein
there shall not be any requirement to maintain a minimum balance. Additionally, certain basic
banking facilities, such as, deposits, withdrawals, ATM cards, etc. are to be provided in such
accounts without any charges.
Further, banks also open accounts under Pradhan Mantri Jan Dhan Yojana without any
minimum balance requirement.
In alignment with the spirit of financial inclusion and implement customer centric banking,
most Public Sector Banks (PSBs) have removed their minimum balance charges in general
savings bank accounts also, while some have rationalised, as per their board approved policy.
The charges are removed/rationalised as part of their business strategy with the commercial
wisdom, in view of the perceived benefits which may arise in terms of growth in deposits,
among others.
PSBs have also implemented a multi-pronged strategy to attract CASA (Current Account
and Savings Account) deposits and to strengthen customer retention, including, inter alia, the
following —
(i). Continuous product innovation and segment specific product offerings using
analytics to drive customer retention;
(ii). Smooth and seamless onboarding of customers by leveraging technology, like use of
Video KYC, digital KYC verification;
(iii). Strategic approach for retention of existing deposits and new deposit acquisition and
digitally enabled customer offerings;
(iv). Financial outreach programs / business campaigns; and
(v). Enhancement of access to mobile and Internet banking through increase in average
number of services offered, customer-friendly features, and regional languages
available on the customer interface.