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Informist, Monday, Jul 29, 2024

MUMBAI – State-owned banks collected 23.31 bln rupees in penalty from account holders in 2023-24 (Apr-Mar) for not maintaining the average monthly minimum balance, Union Minister for State for Finance Pankaj Choudhary said in a written response to a question in the Lok Sabha.

The penalty amount is up around 26% from 2022-23 and is the highest in at least last five years, according to government data submitted in the Lok Sabha. This is despite State Bank of India, the country's largest lender, having stopped levying penalty on customers for not maintaining the average monthly minimum balance since March 2020.

Punjab National Bank collected 6.33 bln rupees in penalty in 2023-24, the most among the state-owned banks. In last five years, state-owned banks have collected a total of 84.95 bln rupees in penalty for breach of the minimum balance norms.

The Reserve Bank of India's norms allow banks to fix the fine for non-maintenance of minimum balance by account holders in a savings account as per their board-approved policy, but they must ensure that the charges are fixed as percentage on the difference between the actual balance maintained and the minimum balance as agreed upon at the time of opening the account.  End

Reported by Richard Fargose

Edited by Ashish Shirke

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