TL;DR Banks collect penalties and service charges for various banking services, including non-maintenance of Average Monthly Minimum Balance (AMMB), debit card annual maintenance, and ATM transactions. While several public sector banks have reduced or discontinued AMMB penalties in recent years, private sector banks have reported rising collections. Debit card annual maintenance charges have also grown substantially, emerging as the largest source of fee income among these categories for public sector banks.

Context

Banks impose various penalties and charges when customers do not comply with the terms and conditions associated with their accounts, loans, or other financial products. These may include charges for delayed loan or credit card payments, cheque dishonour, exceeding prescribed limits, or failing to maintain minimum account balances. While such penalties are intended to encourage timely payments and responsible financial behaviour, they also constitute a source of non-interest income for banks.

The amount collected through these penalties varies across banks and over time, reflecting differences in customer base, the range of banking products offered, fee structures, and customer behaviour. Analysing these collections provides insights into the scale of penalty-based income and how it has evolved over time. It also contributes to discussions on the transparency of banking charges, consumer protection, and whether penalty structures strike an appropriate balance between recovering operational costs, encouraging financial discipline, and ensuring fair treatment of customers.

Who compiles this data?
The data is based on information compiled by the Ministry of Finance and made available through replies to questions raised in Parliament. The ministry collates information received from the Reserve Bank of India and banks, and shares the same in Parliament responses.

Where can I download clean & structured data related to this?

Clean, structured, and ready-to-use dataset on Year and Bank wise Penalties collected for not maintaining Average Monthly Minimum Balance in Savings Bank Accounts for Public Sector Banks is available on Dataful. The data here has been collated from different parliamentary responses over the years.

Key Insights

• Private sector banks reported a sharp increase in Average Monthly Minimum Balance (AMMB) penalty collections, while public sector banks saw a decline. Between 2022-23 and 2025-26 (provisional), total penalties collected by private sector banks increased from ₹3,172 crore to ₹4,949 crore (56% increase). In contrast, collections by public sector banks declined from ₹2,409 crore to ₹2,138 crore (11% decrease), with several PSBs discontinuing such penalties in recent years.

• Large public sector banks such as Punjab National Bank, Bank of Baroda, Canara Bank, Indian Bank, and SBI consistently reported annual collections running into hundreds of crores, indicating that AMMB penalties continued to be a significant source of fee income.

• The 2019-20 PSB mergers changed the bank-wise distribution of penalty collections. After the mergers, consolidated entities reported much higher collections. For example, Indian Bank’s collections increased from ₹141.2 crore in 2019-20 to ₹342.9 crore in 2020-21, while Union Bank of India’s doubled from ₹41.2 crore to ₹83.0 crore over the same period.

• Indian Bank emerged as the highest collector among PSBs in 2024-25. It collected ₹503.4 crore, followed by Bank of Baroda (₹441.4 crore), SBI (₹418.4 crore), and Punjab National Bank (₹417.7 crore).

• Compared to the previous years, Indian Bank’s collections fell by over ₹200 crore, while Punjab National Bank, Canara Bank, Bank of Baroda, and Union Bank of India also reported lower collections. The decline coincides with several PSBs discontinuing AMMB penalties on savings accounts.

• HDFC Bank and Axis Bank accounted for over half of all penalties collected: In  2025-26, HDFC Bank collected ₹1,798 crore, followed by Axis Bank with ₹1,081 crore. Together, they collected ₹2,879.5 crore, accounting for about 58% of the total penalties collected by private sector banks. This exceeds the combined ₹2,137.9 crore collected by all public sector banks during the same year.

• Most major private sector banks reported higher penalty collections over the last 5 years. Between 2022-23 and 2025-26, HDFC Bank’s collections increased by 74%, Kotak Mahindra Bank’s by 51%, Federal Bank’s by 71%, and Yes Bank’s more than tripled. Meanwhile, Dhanlaxmi Bank and Nainital Bank reported no such penalty collections during the period.

• Debit card annual maintenance charges accounted for most of the fee collections compared to ATM charges and Account maintenance charges. Public sector banks collected ₹7,564 crore as debit card charges in 2025-26, compared to ₹1,150 crore from ATM charges and ₹233 crore as account maintenance fees.

• SBI accounted for the largest share of debit card charges. It collected ₹3,117 crore in 2025-26, accounting for over 41% of the total debit card charges collected by public sector banks. Canara Bank and Union Bank of India were the next highest collectors.

• Debit card charges increased across several PSBs. Between 2021-22 and 2025-26, debit card charge collections increased by 94% (from ₹3,905 crore to ₹7,564 crore).

Why does it matter?

The data shows that while Average Monthly Minimum Balance (AMMB) penalties remain a source of non-interest income for banks, the trend differs across public and private sector banks. Several public sector banks have reduced or discontinued such penalties in recent years, leading to a decline in collections. In contrast, private sector banks have reported a steady increase, with a few large banks accounting for a significant share of the total.

The analysis also highlights that debit card annual maintenance charges have become an important source of income, more than AMMB penalties for public sector banks, generating over ₹7,500 crore in 2025-26—more than three times the amount collected through AMMB penalties. Together, these trends illustrate how the composition of banks’ fee-based income is evolving and underscore the importance of greater transparency around the charges borne by customers.

Key Numbers

• ↑ ₹3,172 crore → ₹4,949 crore — Private sector banks’ AMMB penalty collections (FY 2022-23 to FY 2025-26)

• ↓ ₹2,409 crore → ₹2,138 crore — Public sector banks’ AMMB penalty collections (FY 2022-23 to FY 2025-26)

• ↑ ₹3,905 crore → ₹7,564 crore — PSBs’ debit card annual maintenance charges (FY 2021-22 to FY 2025-26)

• ₹2,880 crore (58%) — HDFC Bank & Axis Bank’s share of private sector AMMB penalties in FY 2025-26