The background: Public and private banks charge customers for services including debit card use, ATM access, and account upkeep. Some fees have been removed by public sector banks while others have risen in recent years.
What is the debit card fee?
The Finance Ministry informed Parliament about charges collected by public sector banks. The main one is the debit card fee, described as annual maintenance charges. These cover costs for issuing cards, managing services, replacements, infrastructure, and support. They also support security systems, fraud monitoring, online payments, point-of-sale terminals, and card renewals.
Bank of Baroda notes on its site that this modest fee maintains secure and continuous banking access.
Ministry data showed the 12 public sector banks collected 3,905.5 crore rupees in debit card charges during 2021-22. This rose to 7,563.8 crore rupees by 2025-26, marking 93.7 percent growth. Per card, the amount increased from about 61 rupees to 115.1 rupees, up 88.8 percent.
What other fees do banks impose?
Parliament data covered ATM charges and account maintenance fees. ATM charges include income from customer withdrawals and interchange fees from other banks. An interchange fee is paid when a card from one bank is used at another bank’s ATM. The net annual figure for most public sector banks is negative, except for State Bank of India, as they pay more to larger networks than they earn.
Account maintenance fees have been dropped by most public sector banks. Only State Bank of India still applies them, and only to current accounts used mainly by businesses.
Why apply low-balance penalties?
A low-balance penalty applies when the average account balance stays below a set threshold over time. It is not charged for a single dip that recovers quickly. These fees cover operational costs, support lending, and aid liquidity management.
Reserve Bank of India guidelines allow such charges if they follow board-approved policies and remain reasonable and clear. Ten of the 12 public sector banks have ended penalties for savings accounts, while two adjusted them. All 12 still collected some amounts in 2025-26, though most saw declines from the prior year. Private banks continue the practice.
Over four years, the 12 public sector banks gathered 10,230.75 crore rupees in low-balance charges, while 21 private banks collected 15,939.62 crore rupees.
