Banks Rake in ₹4,818 Crore from Minimum Balance Penalties in FY25: Report

• Indian banks collected ₹4,818 crore in penalties from customers failing to maintain minimum average balances in FY2024-25.
• Private banks led the collections with ₹2,772.2 crore, while public sector banks collected ₹2,045.7 crore.
• HDFC Bank, Axis Bank, and ICICI Bank were the top private lenders contributing to these penalties.
• A parliamentary committee highlighted that penalties are disproportionately high and cause financial stress, especially for economically weaker sections.
• The committee recommended fairer alternatives like treating shortfalls as loans, capping lifetime penalties, or blocking withdrawals instead of levying charges.