ICICI Bank hikes minimum savings balance to Rs 50,000: What it means for you

India Today

4 days ago

ICICI Bank, India's second-largest private lender, has announced a sharp increase in the minimum monthly average balance (MAB) requirement for its savings accounts, effective August 1, 2025.The change applies to all new accounts opened after that date, setting a new benchmark in the industry for the highest MAB requirement among domestic banks.Under the revised structure, customers in metro and urban branches must maintain a minimum average balance of Rs 50,000, a steep jump from the current Rs 10,000. In semi-urban areas, the MAB will rise from Rs 5,000 to Rs 25,000, while rural accounts will require Rs 10,000, up from Rs 2,500.PENALTY AND NON-COMPLIANCE CHARGESadvertisement
ICICI Bank will impose a penalty of 6% of the shortfall in the required MAB or Rs 500, whichever is lower.For example, a shortfall of Rs 10,000 in a metro branch would ordinarily result in a Rs 600 penalty, but under the new rules, the fee is capped at Rs 500.The bank has also revised its cash transaction rules. Customers will get three free cash deposit transactions per month, up to a cumulative value of Rs 1 lakh. Beyond this, charges of Rs 150 per transaction or Rs 3.50 per Rs 1,000 deposited (whichever is higher) will apply.If both the transaction count and value limits are breached simultaneously, the higher of the two applicable charges will be levied. Third-party cash deposits will be capped at Rs 25,000 per transaction.Savings Account by das.koustav1992 Cheque return fees have been set at Rs 200 for outward returns (cheques deposited by the customer) and Rs 500 for inward returns (cheques issued by the customer) for financial reasons.HIGHEST AMONG PEERSThe hike significantly distances ICICI Bank from its peers. HDFC Bank's MAB requirement remains at Rs 10,000 in metro and urban branches, Rs 5,000 in semi-urban branches, and Rs 2,500 in rural branches.The State Bank of India, India's largest lender, abolished its minimum balance rule in 2020. Most other banks keep their MAB requirements between Rs 2,000 and Rs 10,000.Banking analysts say the move signals ICICI's clear push toward premiumisation, targeting high-net-worth and mass-affluent customers who are more likely to purchase additional financial products such as insurance, investments, and brokerage services.IMPACT ON CUSTOMERSExisting ICICI customers remain unaffected for now, but the changes could prompt similar moves by other lenders, especially as banks compete for wealthy savers amid India's growing GDP and skewed wealth distribution. Banks are already facing stiff competition from mutual funds, portfolio management firms, and private equity in attracting affluent clients.To ensure basic banking access, RBI guidelines mandate that Basic Savings Bank Deposit Accounts (BSBDAs), including those opened under the Pradhan Mantri Jan Dhan Yojana, have no minimum balance requirement. These accounts, however, come with transaction limits and do not offer the same features as regular savings accounts.WHAT'S BEHIND THE MOVE?advertisementThe hike in MAB comes just months after ICICI Bank cut its savings account interest rates by 0.25 percentage points. Since April 16, 2025, balances up to Rs 50 lakh earn 2.75 percent interest, while balances above Rs 50 lakh earn 3.25%.The move followed similar rate reductions by HDFC Bank and Axis Bank, in line with the Reserve Bank of India's consecutive rate cuts.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends