March 2025

$ 'service’ comes at cost in the form of charges

Minimum balance charges:

The majority of saving accounts expect customers to hold a minimum balance. Bank accounts dipping below the limit incur a penalty that usually varies anywhere from Rs 300 to 1,000 depending on the bank and account classification.

ATM withdrawals:

Banks usually don't charge a fee for a few withdrawals from an ATM expected to be of Rs 20-50 outside the bank's ATM network. Within the network of the banks, the own charges are lower than the corresponding network ATM. The maximum limit on charging fees is kept between Rs 20-50.

Cheque bounce fees:

Banks impose this fine for bouncing of cheques. Fines would range from Rs 250 to Rs 500.

Cheque book issuance fees:

These fees are charged for the issuance of the cheque book after the free limit is exhausted. The fee payable for 25 leaves cheque book is expected to be around Rs 100.

Fund transfer fees:

NEFT & RTGS fund Credit Transfers. Banks charge BEFT as, up to Rs 10,000 is Rs 2.25 and higher Rs 200,000 is Rs 24.75 with Banking limit of transfer of Rs 2 Lacs, then 20,000 above of NEFT range is expected to be.

Charging fees for account maintenance:

Certain accounts, especially current accounts, may charge a monthly maintenance fee unless specific conditions are met. These annual fees can be anywhere from Rs 500 to Rs 1,500.

Overdraft charges:

For accounts that have an overdraft (negative balance), banks impose fees that can be quite high. These fees are typically charged per event and can be about Rs 400 to Rs 800 each time.

Extra service charges:

Banks often charge for extra services such as providing balance confirmations (costing approximately Rs 50– Rs 100), executing stop payment instructions (about Rs 120), and performing transactions through a power of attorney (costing roughly Rs 250).

IMPS charges:

IMPS (Immediate Payment Service) is a convenient and fast way to transfer funds in India, but the charges for IMPS transactions vary across banks. Each bank has its own fee structure based on the transaction amount, with some offering free transfers for smaller amounts while others levy nominal charges. It’s important for customers to check their bank’s policies to understand the applicable charges. India Today

August 2025

ICICI increasing the minimum balance ¹

The second largest bank in the private sector, raised its minimum balance requirement for new savings account opened on or after August 1, 2025.
This comes at a time when public sector banks have either lowered their minimum or waived them altogether.

Debate between class vs mass banking

the latter wins hands down from the stability point of view.
Core current and savings accounts deposits are much less volatile when there are many of them with small balances rather than few accounts with large balances.

Global example

Northern Rock, a UK based mortgage lender that collapsed spectacularly during the financial crisis of 2007 - 08, thanks to its dependence on the wholesale market for lending funds.

New MBR

urban - 50,000
semi urban - 25,000
rural - 10,000

Penalty

failing to meet this, may have to pay penalty worth 6% of the shortfall, or 500 rupees whichever is less.

Exceptions

PM Jan Dhan accounts and basic saving bank deposit accounts are exempted, as these are zero balance accounts.

Outside the Purview of RBI

RBI governor said that the matter does not fall under the regulator's domain.
Banks have their freedom to decide the MBR they want to keep in their savings account.

References

Mint 13.08.2025 ↩