ICICI BANK RAISES MINIMUM BALANCE REQUIREMENT FOR SAVINGS ACCOUNTS
Overview of the New Minimum Balance Policy
ICICI Bank, India’s second-largest private sector bank, has announced a significant increase in the minimum monthly average balance (MAB) required for its savings accounts. The revised rules, effective August 1, 2025, apply only to new savings accounts opened from that date onward, leaving existing customers under the previous balance requirements.
In metro and urban branches, the MAB has jumped from Rs 10,000 to Rs 50,000.
For semi-urban locations, the MAB is now Rs 25,000, up from Rs 5,000.
Rural branches require a minimum balance of Rs 10,000, increased from Rs 2,500.
This move sets a new benchmark among domestic banks for the highest minimum balance thresholds and signals ICICI’s increased focus on an affluent customer segment.
Penalty and Charges
Customers failing to maintain the required MAB will incur a penalty of 6% of the shortfall or Rs 500, whichever is lower.
The penalty aims to incentivize compliance but has been met with criticism for being relatively steep compared to other banks that have eased such conditions.
ICICI Bank continues to offer three free cash transactions per month (deposits or withdrawals) up to a cumulative monthly value of Rs 1 lakh, after which charges apply.
Context and Impact
This is the first MAB hike by ICICI Bank since 2015.
The increased balance requirement contrasts with other leading banks like State Bank of India (SBI), which abolished minimum balance rules in 2020, and others maintaining lower thresholds.
ICICI Bank’s revised policy applies strictly to new accounts, sparing existing customers and salary accounts which remain unaffected.
Some customer groups, such as pensioners, are exempt from penalties.
The bank’s interest rate on savings accounts remains low at approximately 2.5% per annum.
Customer and Market Reaction
The hike has sparked mixed responses, with some users calling the move “elitist” and expressing concerns over affordability and accessibility for average customers.
Others view it as a strategy for ICICI to prioritize high-net-worth clients while trimming exposure to mass-market segments.
The Reserve Bank of India (RBI) keeps a watchful eye on such changes to ensure inclusivity and fair banking practices.
FREQUENTLY ASKED QUESTIONS (FAQ)
Q1: When did ICICI Bank’s new minimum balance rule come into effect?
The new minimum average balance requirements apply to all savings accounts opened on or after August 1, 2025.
Q2: What are the new minimum balance requirements for ICICI Bank savings accounts?
Rs 50,000 in metro and urban locations
Rs 25,000 in semi-urban locations
Rs 10,000 in rural locations
Q3: Does the new rule apply to existing account holders?
No, existing savings account holders maintain their previous minimum balance thresholds.
Q4: What penalties are imposed for not maintaining the minimum balance?
A penalty of 6% of the shortfall or Rs 500 (whichever is less) is charged for failing to maintain the required balance.
Q5: Are there any exemptions to the penalty?
Pensioners and salary account holders are generally exempt from these penalties.
Q6: How many free cash transactions are allowed under the new policy?
Customers get three free cash deposits or withdrawals per month up to a cumulative monthly limit of Rs 1 lakh.
Published on: August 9, 2025
Published by: PAVAN
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