ICICI Bank, one of India’s largest private sector lenders, has significantly increased the minimum average monthly balance (MAB) requirement for new savings accounts, a move that is reshaping the competitive landscape of the banking sector. Effective August 1, 2025, new customers in metro and urban areas must maintain a minimum balance of ₹50,000, a massive five-fold jump from the previous requirement of ₹10,000.
This steep hike positions ICICI Bank with the highest minimum balance requirement among domestic banks, a clear departure from the industry norm. For comparison, India’s largest lender, the State Bank of India (SBI), completely abolished its minimum balance rule in 2020. Even HDFC Bank, another major private lender, mandates a much lower ₹10,000 for metro and urban branches.
New Rules Across All Regions
The revised policy applies to new savings accounts opened from August 1 and affects customers across all geographical locations:
- Metro and Urban Areas: The minimum average balance has been increased from ₹10,000 to ₹50,000.
- Semi-Urban Areas: The MAB is now ₹25,000, up from ₹5,000.
- Rural Areas: The minimum balance has doubled from ₹2,500 to ₹10,000.
It’s important to note that existing customers are not affected by this change and will continue to operate under their previous minimum balance requirements.
Impact on Customers and Industry Trends
The bank’s decision is being seen by analysts as a strategic shift towards attracting a more affluent customer base. By targeting high-net-worth individuals and mass-affluent customers, the bank aims to increase fee-based income by cross-selling more financial products such as insurance, brokerage, and investment services.
However, the move has drawn criticism from some quarters, with concerns raised about financial inclusivity. While ICICI Bank is clearly moving towards a premium model, the Reserve Bank of India (RBI) mandates that all banks offer Basic Savings Bank Deposit Accounts (BSBDAs), which have a zero minimum balance requirement to ensure access to basic banking services for all citizens.
Customers who fail to maintain the new minimum balance will incur a penalty. According to the bank’s revised fee schedule, the charge will be 6% of the shortfall or ₹500, whichever is lower. This change, coupled with a recent reduction in savings account interest rates, suggests that ICICI Bank is fine-tuning its strategy to maximize profitability from its core banking operations.
