Big relief to 72 crore people! Now the tension of minimum balance is over, Finance Minister made a big announcement to remove penalty

No Minimum Balance Penalty: Union Finance Minister Nirmala Sitharaman said on Monday that there are about 72 crore Basic Savings Bank Deposit Accounts (BSBDA) in the country, in which there is no penalty for not maintaining minimum balance. These accounts also include accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY).

In response to a question in the Lok Sabha, he said that zero balance savings account facility is provided by banks in BSBDA accounts. The objective of this system is to provide banking services to all the people of the country.

Minimum balance requirement removed

The Finance Minister said that this initiative has been taken especially to connect the people living away from banking facilities, weaker sections and small depositors with the banking system. Through this, the government wants to promote financial inclusion, so that more and more people can take advantage of the formal banking system. There is no requirement to maintain minimum balance in these accounts. Basic banking services like deposits, withdrawals and ATM access are provided to account holders free of charge and no penalty charges are levied.

Banks recovered ₹8,092 crore as penalty

In case of other accounts, banks may impose charges for non-maintenance of Minimum Monthly Average Balance (MAB). This fee is levied as per the board approved policies of the banks and extant instructions of RBI. As per RBI rules, such charges should be reasonable, transparent and commensurate with the cost of providing services.

During the financial year 2022-23 to 2024-25, public sector banks (PSBs) have recovered a total of Rs 8,092.83 crore from current account and savings account holders for not maintaining minimum average balance.

The real purpose of collecting penalty

Sitharaman said that Rs 8,092.83 crore recovered in the last three financial years is only about 0.23 per cent of the total income of public sector banks. This makes it clear that such charges are a very small part of banks’ income and their purpose is not to increase revenue through penalties, but to cover the cost of providing banking services.

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These banks including SBI removed the charges

To provide better services to customers, public sector banks have reviewed their service charges. Based on the policies decided by the Board and business needs, SBI has completely abolished the charge for not maintaining Minimum Average Balance (MAB) in the savings account from March 2020. Apart from this, nine public sector banks have also completely removed such charges in 2025. Whereas two banks minimum balance The charges associated with it have been reduced or simplified.