Public sector banks in India have traditionally earned significant revenue,about ₹8,495 crore over FY20–24—from penalising low savings account balances, averaging ₹1,699 crore per year . Despite SBI dropping such fines after FY20, this income stream actually increased, with 11 PSBs collecting ₹2,331 crore in FY24 alone—a 25 % jump from FY23 . Notably high contributors included PNB (₹1,538 crore over five years), Indian Bank (₹1,466 crore), BoB (₹1,251 crore), and Canara Bank (₹1,158 crore).

In response to competitive pressures and declining interest rates, Canara Bank has just scrapped its monthly average balance requirement across all savings account types (regular, salary, NRI), effective June 1, 2025 . This move follows SBI (which waived fines in 2020) and is part of a growing trend among PSBs to eliminate minimum‐balance penalties.

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