Can banks decide minimum balance requirement for savings accounts? Here's what RBI Governor Sanjay Malhotra said
Malhotra said that some banks have kept their minimum balance requirement at ₹ 10,000, while some have kept it at ₹ 2,000, and it's up to the individual banks to decide how much of a minimum account balance (MAB) they fix for their customers.
'The RBI has left it to individual banks to decide on what minimum balance they want to set. Some banks have kept it at ₹ 10,000, some have kept ₹ 2,000, and some have exempted (customers). It is not in the regulatory domain (of RBI),' said Governor Malhotra on the sidelines of a 'Financial Inclusion Saturation Drive' event in Gujarat's Mehsana district.
Malhotra's response comes as India's second-largest bank, ICICI Bank, increases its minimum account balance requirement to ₹ 50,000 per month for new savings accounts opened from 1 August 2025. The minimum account balance or minimum balance requirement is the lowest amount a customer can keep in their savings account to avoid a monetary penalty from the institutional lender. Every bank has its individual requirements mandated for its customers based on the type of savings account and the location of the branch in India.
The minimum balance requirement for a bank's branch in the Metro and Urban region is significantly higher than that of the Semi-Urban, Rural, or Rural Fi (Rural Financial Inclusion) branches.
Mint reported earlier that ICICI Bank increased its minimum balance requirement for the metro and urban region branches to ₹ 50,000 per month, compared to its previous levels of ₹ 10,000 per month for a savings account.
For the bank's semi-urban branches, ICICI Bank increased the minimum account balance requirement to ₹ 25,000 per month and ₹ 10,000 per month for the rural branches, compared to the previous level of ₹ 5,000 each, every month.
India's State-run banks offer lower minimum balance requirements, as compared to the private banks, except for the Jan Dhan accounts. However, many PSU banks have removed the minimum account balance requirement, which gives customers the flexibility to not maintain a balance in their accounts in order to prevent charges.
RBI Governor Sanjay Malhotra also emphasised the need for digital literacy in India, and said that opening bank accounts is just the beginning, and people should use various schemes given by the government to their own benefit.
'Earlier they used to say if you do not study you will not prosper. In today's age, this is the same for digital literacy. If you do not have digital literacy you will not progress,' said Malhotra, cited in the agency report. 'But opening an account is just the beginning, a door has been opened. The government has started various schemes like accident insurance, life insurance and Atal pension scheme. I urge everyone to take benefit of these. To get proper banking service is your right,' he said, cited the news agency.
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