‘Up To The Banks': RBI Governor On ICICI Bank Raising Minimum Balance Requirement To 50,000
On August 11, Reserve Bank of India Governor Sanjay Malhotra responded to ICICI Bank's move to hike the minimum balance requirement for non-salary savings accounts, stating that such decisions do not fall 'under any regulatory domain."
Effective August 1, the private lender increased the minimum monthly average balance (MAB) for new savings accounts opened in metro and urban branches from Rs 10,000 to Rs 50,000 — a fivefold jump. For semi-urban and rural branches, the MAB has also been raised fivefold to Rs 25,000 and Rs 10,000, respectively, as per the bank's website.
'RBI has left it to the banks to decide on the minimum balance. Every bank has its own requirements. This is not under any regulatory domain," Malhotra reiterated.
Public sector banks generally have lower balance requirements and often waive them for Jan Dhan accounts. Many have completely removed the minimum balance mandate, with no penalties for non-maintenance.
A civil society organisation advocating banking stakeholders' interests has written to the Finance Ministry, requesting its intervention into ICICI Bank's decision to raise the minimum average balance (MAB) requirement for new savings accounts, and said such a move is detrimental to the government's vision of inclusive banking and growth.
In a letter to the finance secretary, 'Bank Bachao Desh Bachao Manch' termed the private lender's decision as 'unjust and regressive".
'This retrograde decision undermines the principle of inclusive banking," the forum's joint conveners, Biswaranjan Ray and Soumya Datta, claimed.
The civil society organisation called for the immediate withdrawal of the decision, and appealed to the government to protect depositors' interests and ensure broader financial inclusion.
Traditionally, public sector banks have lower balance requirements compared to private lenders with the requirement waived for Jan Dhan accounts.
Several public sector banks have done away with the requirement, and customers who fail to maintain the minimum prescribed balance do not need to pay a penalty.
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