Banks Earn Rs 7,100 Crore from Minimum Balance Penalties in FY26

During the financial year 2025-26, banks in India amassed an impressive Rs 7,100 crore through penalties imposed on customers for not maintaining the required minimum average balance (MAB) in their accounts. This information was disclosed by the government in Parliament, revealing a significant increase in collections compared to the previous year. The data presented in response to a query in the Lok Sabha indicated that commercial banks collected Rs 7,085 crore from minimum balance fees, marking a rise from approximately Rs 6,812 crore in the fiscal year prior. This trend highlights the growing reliance of banks on these penalties as a source of revenue, particularly among private sector institutions, which have emerged as the primary beneficiaries of this practice.

Private sector banks were the standout performers in this financial landscape, contributing a substantial Rs 4,948 crore, which accounts for nearly 70% of the total penalties collected. This figure represents a 17% increase from the previous year, underscoring the increasing burden on customers to maintain their account balances. HDFC Bank led the pack, generating Rs 1,800 crore from minimum balance penalties, followed by Axis Bank, which collected Rs 1,081 crore. Other notable private banks included ICICI Bank with Rs 353 crore, Kotak Mahindra Bank at Rs 290 crore, Yes Bank with Rs 195 crore, and IDBI Bank, which garnered Rs 175 crore. This data paints a clear picture of the financial landscape in which these banks operate, as they continue to capitalize on penalties as a means of enhancing their revenue streams.