ICICI Bank’s New ₹50,000 Minimum Balance Rule Sparks Debate – RBI Governor Responds

A new savings account policy by ICICI Bank has triggered strong reactions from customers, civil society groups, and financial experts. The private sector banking giant has raised the minimum average balance (MAB) requirement for savings accounts in metro and urban areas to ₹50,000 — five times the earlier threshold of ₹10,000.

The new rule took effect on August 1, 2025, and applies initially to new accounts opened on or after this date. For existing accounts, the earlier MAB limits still apply, but industry observers believe a similar revision for older accounts could follow in the coming months.

From ₹10,000 to ₹50,000 – A Sharp Jump

Under the new policy:

  • Customers in metro and urban branches must keep an average monthly balance of ₹50,000.

  • The requirement is calculated over the month, meaning customers can balance out lower daily amounts by maintaining higher balances on other days.

  • Falling short will lead to penalty charges, which could be as high as ₹500–₹1,000 per month.

For many everyday banking customers, this represents a substantial increase in the cost of maintaining an account.

Criticism and Public Backlash

The announcement has been met with heavy criticism. Civil society forum “Bank Bachao Desh Bachao Manch” has written to the Finance Ministry urging it to step in, calling the decision “unjust” and “anti-inclusive.”

Their concerns:

  • Financial exclusion – Low-income and working-class customers may find it impossible to maintain such high balances, forcing them out of mainstream banking.

  • Contradiction with government policy – The change goes against India’s push for inclusive banking under schemes like Jan Dhan Yojana.

“Such a regressive move will push weaker sections away from formal banking,” said the forum’s joint conveners, Biswaranjan Ray and Soumya Dutta.

What RBI Has to Say

Responding to questions about the rule, RBI Governor Sanjay Malhotra clarified on August 11, 2025:

“This is purely a commercial decision of the bank. It does not fall under any regulatory jurisdiction.”

The statement effectively means the RBI will not interfere unless the bank violates consumer protection laws. Customers, however, still have the option to approach the Banking Ombudsman if they feel unfairly treated.

Why Would a Bank Raise the MAB So Drastically?

Banking analysts point to three main reasons:

  1. Increase deposits – A higher minimum balance gives the bank more funds for lending and investment.

  2. Target affluent customers – The rule filters for customers with higher financial capacity, reducing servicing costs for low-value accounts.

  3. Operational efficiency – Managing low-balance accounts can be costly; higher MAB helps offset this.

Not All Banks Follow the Same Policy

Public sector banks generally have lower MAB requirements, and many accounts — especially Jan Dhan accounts — require no minimum balance at all.

  • SBI’s Jan Dhan accounts – Zero balance required.

  • Regional Rural Banks – Often waive MAB entirely for rural customers.

Impact on Customers

The decision will:

  • Add pressure on middle-class households in metro areas who keep modest balances.

  • Have little immediate effect on rural customers, as the rule currently applies to urban and metro branches.

  • Potentially influence other private banks — if ICICI’s strategy works, others may adopt similar high-balance requirements.

Your Alternatives

If the ₹50,000 rule doesn’t suit you, here are some options:

  • Switch to a public sector bank – Lower or no MAB requirements.

  • Opt for a Jan Dhan account – Zero balance needed.

  • Try digital banks or fintech accounts – Many offer zero or minimal balance requirements with full online access.

The Bigger Picture

ICICI Bank’s new policy reflects a broader trend in private banking — shifting towards higher-value customers while reducing the cost of servicing low-balance accounts. But it also raises an important question: Where does that leave the average Indian saver?

With the RBI confirming it will not intervene, the choice rests with consumers — either adapt to the higher balance requirement or move to institutions that better suit their needs.

Whether this move sets a new industry benchmark or is rolled back under public and political pressure will become clear in the months ahead.

Comments

Post a Comment

Popular posts from this blog

Aman Shrivas Sets New Standard in EdTech with Dream Mission: India's First Ethical Skill-Based Platform

Image
Aman  Shrivas, the CEO of  Dream Mission , is leading the way in revolutionizing the edtech landscape in India. As the founder of India's first ethical skill-based edtech organization, Aman has created a platform that not only provides digital skills training but also offers employment opportunities in various fields. What sets Dream Mission apart is its unwavering commitment to ethical selling practices, distinguishing itself from the manipulative tactics often employed by others in the marketing industry. Comprehensive Training and Employment Opportunities Under Aman's leadership, Dream Mission has become a beacon of change by offering comprehensive training in a range of digital skills. The organization equips individuals with the expertise required to excel in today's highly competitive job market. However, Dream Mission goes beyond mere training by providing work opportunities on a daily, contract, commission, and tutoring basis. This unique model ensures that individu...
Read more

Sobia Nabi: Champion of Public Speaking, Gender Equality, and Student Leadership in India

Image
Sobia Nabi, known affectionately as Tabu, is a 19-year-old rising star from Kupwara, Jammu and Kashmir, making waves in the fields of public speaking and social advocacy. Currently pursuing her Master’s in Political Science from the University of Delhi, Sobia has already established herself as a leader in the academic and social justice spaces. As the Secretary & President of Aawaz ,The Debating Society and Anti-Sexual Harassment Committee at Zakir Husain Delhi College (Evening), she has championed causes such as gender equality and youth empowerment. Her accomplishments as an ambassador for Lafz India and her awards in debating and essay writing reflect her passion for leadership and social change. Early Life and Education Sobia Nabi was born on May 26, 2003, in Kupwara, a picturesque town nestled in Jammu and Kashmir. From an early age, Sobia demonstrated a keen interest in academics and leadership. Her parents, especially her mother Hassina Begum, supported her aspirations, fost...
Read more

Meet Pramod Bhardwaj: The Rising Instagram Marketing Coach Empowering Online Growth

Image
 Pramod Bhardwaj, born on February 16, 2007, in Dewarbod, Chhattisgarh, India, is a young yet rapidly emerging Instagram marketing coach. At just 17, he has already developed a strong expertise in helping clients grow their Instagram accounts through effective strategies. Pramod is currently a 12th-grade commerce student, actively balancing his studies with his passion for digital marketing and online entrepreneurship. Inspired and mentored by Aman Shrivas, Pramod has acquired vital marketing skills that allow him to guide others on how to effectively manage and grow their social media presence. As a native of Dewarbod, Pramod remains closely connected to his roots and strives to uplift his community by sharing opportunities in online business and social media. His mission is not only personal success but also to help others achieve their goals and aspirations in the digital space. Biography Pramod Bhardwaj is a dedicated Instagram Marketing Coach with a passion for empowering clie...
Read more