ICICI Bank faces backlash, reduces minimum average balance for new savings accounts to Rs15,000

New Delhi: Facing widespread outrage, private lender ICICI Bank has partially reversed its minimum average balance (MAB) requirements from Rs50,000 to Rs15,000 for new customers in Metro and urban areas.

The revision came after a pushback from customers and days after the second-largest bank in the country raised the MAB requirement from Rs10,000 to Rs50,000 for new customers in urban cities.

The minimum balance that new ICICI Bank customers in semi-urban areas must maintain has also been reduced to Rs7,500 from Rs25,000.

For rural locations, the MAB has been reduced to Rs2,500 from Rs10,000 as recommended earlier.

However, the bank has clarified that if customers keep less balance than the prescribed limit in their account, then they will have to pay a penalty.

Earlier, HDFC Bank followed suit by elevating MAB to Rs25,000, effective from August 1, 2025 for new savings account holders.

As per the HDFC Bank updated terms, accounts holders should maintain Rs 25,000 balance. For urban and metro bank branches, the penalty is calculated as 6 per cent of the shortfall or Rs600, whichever is lower.

Major lenders like SBI, PNB and Canara Bank have removed minimum balance requisite for saving accounts, while also removing penalty charges for non-maintenance.

Meanwhile, Reserve Bank of India (RBI) governor Sanjay Malhotra has said that the minimum balance limit for saving accounts will be decided by banks as the decision does not fall under any regulatory jurisdiction, after India’s second largest lender ICICI Bank raised the monthly minimum average balance requirement for all customer segments.

He further said that some banks have fixed this limit at Rs10,000, while some banks have kept this limit at Rs2,000 for customers.

However, there are many banks that have completely removed it for their customers. "This decision does not fall under the regulatory domain," he clarified.

According to an earlier ICICI Bank's decision, customers at metro and urban locations who opened their savings accounts on or after August 1 had to maintain Rs50,000 monthly average balance to avoid penalties. The minimum average balance for older customers remained Rs10,000.