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ICICI Bank revises minimum savings account balance
After facing widespread criticism, private lender ICICI Bank partially reversed its minimum average balance (MAB) requirements on Wednesday, reducing the requirement from Rs 50,000 to Rs 15,000 for new customers in Metro and urban areas.
Jay Kotak, Co-Head at Kotak Mahindra Bank's digital banking arm, Kotak 811, slammed the bank's new policy, remarking that 90 per cent of Indians make less than ₹25,000 a month. He said a ₹50,000 minimum balance implies a sum equal to 94% of Indians' monthly income to be left with the bank at all times.
New MAB, penalty, balance for senior citizens
The minimum balance that new customers in semi-urban areas must maintain has also been revised from Rs 25,000 to Rs 7,500.
For rural locations, the MAB at ICICI Bank has been reduced to Rs 2,500 from Rs 10,000 as recommended earlier.
India’s second-largest lender further clarified that if customers keep a balance less than the prescribed limit in their account, then they will have to pay a penalty.
The minimum average balance for older customers remained Rs 10,000.
Earlier in the day, HDFC Bank followed suit by elevating MAB to Rs 25,000, effective from August 1, 2025, for new savings account holders.
As per the HDFC Bank updated terms, account holders should maintain a Rs 25,000 balance. For urban and metro bank branches, the penalty is calculated as 6 per cent of the shortfall or Rs 600, whichever is lower.
On the other hand, SBI, PNB, and Canara Bank have removed the minimum balance requirement for savings accounts and also removed penalty charges for non-maintenance.
Reserve Bank of India (RBI) Governor Sanjay Malhotra said that the minimum balance limit for savings accounts will be decided by banks, as the decision does not fall under any regulatory jurisdiction, after ICICI Bank raised the monthly minimum average balance requirement for all customer segments.
He added that some banks have fixed this limit at Rs 10,000, while some banks have kept this limit at Rs 2,000 for customers.
However, some banks have completely removed the limit for their customers. "This decision does not fall under the regulatory domain," he clarified.