ICICI Bank
In a significant move, ICICI Bank, India’s second-largest private lender, has raised its monthly minimum average balance (MAB) requirement for all customer segments, effective August 1. This change has put it in contrast with other banks, including the country’s largest lender, State Bank of India (SBI), which had scrapped the minimum balance rule altogether in 2020.
The new rules state that customers in metro and urban locations who opened their savings accounts on or after August 1 must now maintain a hefty ₹50,000 monthly average balance to avoid penalties. For existing customers of ICICI Bank in these areas, the MAB remains at ₹10,000. New customers in semi-urban locations will be required to maintain ₹25,000, while rural customers will need to keep ₹10,000. The MAB for old customers of ICICI Bank in rural and semi-urban areas is ₹5,000 a month.
Customers failing to maintain the required MAB will face a penalty of 6% of the shortfall or ₹500, whichever is lower. This move stands out from the majority of other banks that maintain significantly lower thresholds, typically between ₹2,000 and ₹10,000.
In addition to the MAB changes, the bank has also revised its cash deposit and withdrawal policies. Customers are now allowed three complementary cash deposits free of cost into their savings accounts, after which a fee of ₹150 per transaction will be levied. The number of complementary cash withdrawal transactions per month also remains at three. The third-party cash deposit limit has been set at ₹25,000 per transaction for all savings accounts.
The bank had also reduced the interest rate on its savings accounts in April 2025 by 0.25%, with savings accounts with deposits up to ₹50 lakh now earning 2.75% interest.
The decision to hike the MAB by a major private lender is being seen as a move to rationalize penalties, but it has also raised concerns among consumers and financial experts about the potential burden on account holders, especially in an environment where other banks are offering more lenient terms.
Source: NDTV