ICICI Bank Slashes Minimum Balance After Customer Outcry
- ICICI Bank cuts minimum average balance for new savings accounts in metro/urban areas from Rs 50,000 to Rs 15,000 after backlash.
- Semi-urban MAB reduced to Rs 7,500, rural MAB to Rs 2,500; penalties still apply for shortfalls.
- Move follows criticism and comes as public banks like SBI and PNB have removed MAB requirements entirely.
Private lender ICICI Bank has rolled back its steep hike in minimum average balance (MAB) requirements for new savings account holders following widespread criticism from customers. The bank announced that for new customers in metro and urban areas, the MAB has been reduced from the recently implemented Rs 50,000 to Rs 15,000.
This decision marks a partial reversal of a policy introduced earlier this month, which had raised the MAB for new urban accounts from Rs 10,000 to Rs 50,000 a fivefold increase that triggered strong backlash from customers and financial commentators alike.
Under the revised terms, the MAB for semi-urban branches has been cut to Rs 7,500 from Rs 25,000, while for rural branches it now stands at Rs 2,500 instead of Rs 10,000. ICICI Bank has clarified that customers who fail to maintain the prescribed balance will still be subject to penalty charges.
The move comes amid broader scrutiny of banking practices related to minimum balance requirements. Earlier in the day, HDFC Bank also revised its policy, increasing the MAB for new savings accounts in metro and urban areas to Rs 25,000, effective August 1, 2025. According to HDFC Bank, the penalty for non-maintenance will be the lower of Rs 600 or 6% of the shortfall amount.
In contrast, several major public sector lenders including State Bank of India (SBI), Punjab National Bank (PNB), and Canara Bank have removed MAB requirements entirely, along with penalties for non-maintenance, in a bid to encourage financial inclusion.
Commenting on the issue, Reserve Bank of India (RBI) Governor Sanjay Malhotra clarified that setting minimum balance requirements is the prerogative of individual banks and not under RBI’s regulatory jurisdiction. “Some banks have fixed this limit at Rs 10,000, some at Rs 2,000, and many have removed it entirely”, Malhotra said.
The earlier ICICI Bank policy, which applied to customers opening accounts on or after August 1 in metro and urban areas, required a monthly average balance of Rs 50,000 a sharp contrast to the Rs 10,000 requirement for existing customers. The backlash to this change appears to have prompted the lender to ease the requirements, though penalties remain for those who fall short of the revised limits.
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