---
title: "Inside Bank Fees: Data Reveals Shift in Debit Card, ATM, and Account Maintenance Levies"
url: https://projectchintan.com/article/inside-bank-fees-data-reveals-shift-in-debit-card-atm-and-account-maintenance-le-6kls3
publisher: Project Chintan
author: Project Chintan Newsroom
section: Business
published: 2026-07-31T05:56:06.000Z
modified: 2026-07-31T08:02:16.907Z
language: en-IN
---

# Inside Bank Fees: Data Reveals Shift in Debit Card, ATM, and Account Maintenance Levies

Recent Ministry of Finance data tracks a massive 93.7% surge in public sector debit card revenue over four years. While many institutions have abandoned low-balance penalties, private lenders continue to outpace public banks in penalty collection.

## Key takeaways

- Debit card annual maintenance fees at public sector banks rose from ₹61 to ₹115.1 per card between 2021 and 2026.
- Private banks collected ₹15,939.62 crore in low-balance penalties over four years, surpassing the ₹10,230.75 crore collected by public banks.
- Most public sector banks report negative net ATM income as they pay more in interchange fees to SBI and private lenders than they collect.
- Ten out of twelve public sector banks have abolished penal charges for failing to maintain a minimum average balance in savings accounts.

## The Escalation of Debit Card Utility Fees

Data presented by the Ministry of Finance to the Rajya Sabha reveals a significant shift in how public sector banks (PSBs) generate service revenue. The primary driver is the debit card maintenance fee, an annual charge designed to fund the heavy infrastructure required for card issuance, point-of-sale terminals, and fraud surveillance systems. Between the 2021-22 and 2025-26 fiscal years, total collections from the 12 PSBs for these services jumped from ₹3,905.5 crore to ₹7,563.8 crore. This represents a 93.7% growth. On an individual level, the average cost per card rose from ₹61 to ₹115.1, an increase of 88.8%.

## The ATM Interchange Imbalance

ATM revenue models operate on a net calculation involving customer withdrawal fees and interchange fees—payments made between banks when a cardholder uses a competitor's machine. For instance, if an SBI card is used at a Bank of Baroda terminal, SBI must pay an interchange fee to the latter. Analysis shows that for most public sector banks, this revenue stream is actually negative. These institutions pay out more to competitors than they receive in fees. The State Bank of India (SBI) remains the outlier, benefiting from its vast national network, while private banks profit from high transaction volumes in urban centers.

## Phasing Out Penalties and Maintenance Charges

The regulatory environment regarding account maintenance and minimum balance penalties has transformed following Reserve Bank of India (RBI) directives requiring charges to be reasonable and transparent. Most PSBs have stopped charging account maintenance fees, with SBI being the notable exception, though it restricts this levy to current accounts used by businesses. Regarding low-balance penalties—charges applied when an average balance stays below a specific threshold over time—a sharp divide exists between public and private sectors:
- Ten of the twelve PSBs have entirely discontinued penal charges for savings accounts, while others have rationalized the costs.
- Despite this, PSBs collected ₹10,230.75 crore in low-balance fees over the last four years.
- Private banks, which maintain these penalties, collected a significantly higher ₹15,939.62 crore during the same four-year period.

While 11 public banks saw a year-over-year decline in penalty revenue by 2025-26, SBI was the only public lender to see an increase in these collections, signaling a divergence in how the nation's largest bank manages its liquidity and operational costs compared to its peers.

Source: The Hindu — Economy

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Canonical: https://projectchintan.com/article/inside-bank-fees-data-reveals-shift-in-debit-card-atm-and-account-maintenance-le-6kls3
Reported from: The Hindu — Economy