Startup Originals Team
After facing significant public criticism, ICICI Bank has revised its minimum average balance (MAB) requirements for savings accounts, reducing the barriers for new customers across different regions.
Revised Minimum Balance Requirements:
ICICI Bank has cut the MAB for new savings account customers in metro and urban areas from ₹50,000 to ₹15,000. In semi-urban areas, the requirement was lowered from ₹25,000 to ₹7,500; and in rural areas, from ₹10,000 to ₹2,500. However, the MAB for senior citizens remains at ₹10,000. Customers maintaining balances below these thresholds will incur penalties.
Wider Banking Context:
Following ICICI’s move, HDFC Bank raised its MAB to ₹25,000 effective August 1, 2025, for new account holders in urban and metro branches, with penalties calculated as 6% of the shortfall or ₹600, whichever is lower. On the other hand, banks like SBI, PNB, and Canara Bank have removed minimum balance requirements and associated penalties altogether.
Industry Reactions and Regulatory Position
Jay Kotak of Kotak Mahindra Bank criticized the high MABs, pointing out that 90% of Indians earn less than ₹25,000 per month, making the minimum balance unrealistic for most. RBI Governor Sanjay Malhotra clarified that setting MAB limits is a bank-level decision and not regulated by the RBI, explaining that banks have varied policies on minimum balance according to their customer segments.
Conclusion:
The lowering of ICICI Bank’s MAB requirement after public pressure signals the challenge banks face in balancing profitability with customer accessibility. As the landscape evolves, customers have a wider choice between banks with strict or relaxed balance norms, shaping the future of retail banking in India.
