RBI Leaves Minimum Balance Rules to Banks, Says Sanjay Malhotra

• RBI Governor Sanjay Malhotra clarified that the regulator does not fix minimum balance requirements, leaving it to individual banks; some have set it at Rs 10,000 or Rs 2,000, while others have waived it.
• His statement followed ICICI Bank’s decision to raise the minimum balance for new accounts from Rs 10,000 to Rs 50,000, excluding statutory and salary accounts from the change.
• Malhotra made the remarks during a financial inclusion camp visit in Gujarat, part of a nationwide re-KYC and scheme enrolment drive running until September 30.

RBI Governor Sanjay Malhotra has stated that the regulator has left it in the hands of individual banks to determine the size of minimum balance required and there was no regulation checking that.

"What size of minimum balance required is left to the banks. Some have retained Rs 10,000, some Rs 2,000 and others have waived it off entirely. That is not within the regulatory sphere", said Malhotra.

The governor made this statement in Gujarat after a query from newspersons on ICICI Bank increasing the minimum balance requirement to Rs 50,000 from Rs 10,000 for new bank accounts.Malhotra toured a financial inclusion camp at Gozaria gram panchayat in Mehsana to examine re-KYC and scheme enrolment activities. The visit is a part of a countrywide gram panchayat-level campaign that is ongoing up to Sept 30.

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More than 1.41 lakh camps have done re-KYC for 35 lakh accounts since July 1.ICICI Bank has indicated that statutory accounts such as basic savings accounts and salary accounts will still be opened without a minimum balance. The move is viewed to be with a view to enhance the proportion of existing and savings account balances and ease pressure on operating expenses.

Sources further indicated that the new savings account was re-packaged as a new product, with a plethora of fees previously charged on savings accounts no longer levied on these accounts.Savvy experts advise most account owners - particularly those who do not have large surpluses consistently - to use savings accounts with no minimum balance or very low requirement.