ICICI Bank has recently revised its Minimum Average Balance (MAB) requirement for new savings account holders, raising it to ₹50,000 in metro and urban branches. This move has sparked widespread discussion among customers and financial experts, prompting a clarification from the Reserve Bank of India (RBI).
What Has Changed?
Effective August 1, 2025, ICICI Bank has implemented the following changes:
- Metro & Urban Branches: Minimum balance raised from ₹10,000 to ₹50,000.
- Semi-Urban Branches: Increased from ₹5,000 to ₹25,000.
- Rural Branches: Now set at ₹10,000.
Failure to maintain the required balance may result in a penalty of 6% of the shortfall or ₹500, whichever is lower.
RBI’s Clarification
In response to public concern, RBI Governor Sanjay Malhotra clarified during a financial inclusion event in Gujarat:
“The Reserve Bank of India has left it to the banks to decide the quantum of minimum average balance. This issue does not fall under the regulatory domain.”
This means:
- RBI does not regulate minimum balance requirements.
- Each bank is free to set its own MAB policy.
- Some banks have set it at ₹10,000, others at ₹2,000, and some have waived it entirely.
Public Reaction & Concerns
The move has drawn criticism from civil society groups, including the Bank Bachao Desh Bachao Manch, which called the hike “unjust and regressive.” They argue that such policies undermine financial inclusion, especially for low-income and first-time account holders.
Comparative Landscape
While ICICI Bank has raised its MAB sharply, many public sector banks are moving in the opposite direction:
- SBI, PNB, Canara Bank, and Indian Bank have removed penalties for non-maintenance.
- These banks aim to make banking more accessible, especially under schemes like Jan Dhan Yojana.
What It Means for Customers
If you’re planning to open a savings account with ICICI Bank:
- Be prepared to maintain a monthly average balance of ₹50,000 in metro/urban branches.
- Consider alternatives if your banking needs are modest or if you prefer zero-balance accounts.
Conclusion
ICICI Bank’s decision reflects a broader trend among private banks to optimize profitability, but it also raises questions about accessibility. With the RBI stepping back from regulating MAB norms, the onus is now on customers to choose banks that align with their financial habits and needs.
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