Bank Service Charges Far Exceed GST Late Fees Over Three Years, LS Data Reveals

New Delhi: Public sector banks collected Rs 11,480.90 crore from customers over the last three financial years through penalties for non maintenance of minimum balance and charges for SMS alert services, according to data tabled by the Ministry of Finance in the Lok Sabha. The amount significantly exceeds the late fees collected by the government for delayed filing of GST returns during the same period.

Official figures show that banks earned Rs 3,601.01 crore in 2022 to 23, Rs 3,886.38 crore in 2023 to 24, and Rs 3,993.51 crore in 2024 to 25 under the two heads combined, reflecting a steady rise in service related charges.

Penalties for not maintaining the prescribed minimum balance in savings accounts accounted for the larger share at Rs 8,092.83 crore. Collections under this category stood at Rs 2,407.82 crore in 2022 to 23, rose to Rs 2,909.10 crore in 2023 to 24, and remained high at Rs 2,775.91 crore in 2024 to 25.

Charges for SMS alert services contributed Rs 3,388.07 crore over the three years. Banks collected Rs 1,193.19 crore in 2022 to 23, Rs 977.28 crore in 2023 to 24, and Rs 1,217.60 crore in 2024 to 25 under this head.

Bank wise data indicated substantial recoveries by lenders such as Punjab National Bank, Bank of Baroda, Canara Bank, Indian Bank and State Bank of India from minimum balance penalties. Union Bank of India reported the highest collections from SMS alert charges. State Bank of India informed Parliament that it has waived SMS alert charges with effect from January 1, 2020.

In comparison, the government clarified that no penalty is imposed for late filing of GST returns and only prescribed late fees are levied. These collections remained much lower, amounting to Rs 1,960.38 crore in 2021 to 22, Rs 1,968.10 crore in 2022 to 23, Rs 1,987.72 crore in 2023 to 24, and Rs 1,748.74 crore in 2024 to 25.

The Ministry also stated that no fine was imposed for delays in linking Aadhaar with PAN. Fees collected under the applicable structure stood at Rs 570.49 crore in 2022 to 23, Rs 1,237.94 crore in 2023 to 24, and Rs 527.32 crore in 2024 to 25.

The government noted that banks offer zero balance savings accounts, including Basic Savings Bank Deposit Accounts and those opened under the Pradhan Mantri Jan Dhan Yojana, which are exempt from minimum balance requirements. Charges on regular accounts, it said, are governed by board approved policies and Reserve Bank of India guidelines that require transparency and reasonableness.