ICICI Bank, India’s second-largest private-sector lender, recently rolled back a controversial increase in its Minimum Average Balance (MAB) requirements for new savings accounts opened from August 1, 2025. After facing widespread criticism from customers and industry experts, the bank revised its policy to be more customer-friendly and inclusive.The decision comes in the backdrop of changing market dynamics, competitive banking strategies, and the need to make savings accounts more accessible, especially for customers in rural India. In this article, we will cover all the details about ICICI Bank’s new minimum balance policy, its impact on different categories of account holders, possible reasons behind the change, and what customers need to do to avoid penalties.
This comprehensive article explains:
- What led to the drastic change and its prompt reversal
- The updated MAB rules for metro, semi-urban, and rural accounts
- Exemptions, penalties, and calculation methods
- Industry reaction and investor sentiment
- FAQs and recommendations for customers
What Was the Original Hike in Minimum Balance?
On August 1, 2025, ICICI Bank abruptly increased the MAB requirement for savings accounts:
- Metro & Urban: from ₹10,000 → ₹50,000
- Semi-Urban: from ₹5,000 → ₹25,000
- Rural: from ₹2,500 → ₹10,000
Backlash Triggers a Policy Rollback
The proposal met intense criticism. Jay Kotak, son of veteran banker Uday Kotak, warned that “90% of India earns less than ₹25,000 per month—keeping ₹50,000 in a savings account is unrealistic.”
Media outcry and social media trends reflected public dismay. Within days, ICICI Bank reversed its decision and introduced a new, more reasonable MAB structure.
New Minimum Monthly Average Balance (MAB) Rules
| Location New | MAB Requirement |
| Metro / Urban | ₹15,000 |
| Semi-Urban | ₹7,500 |
| Rural | ₹2,500 |
Key Points:
These rules apply only to new savings accounts opened on or after August 1, 2025. Accounts opened before this date continue under the prior MAB norms (e.g., ₹10k for urban, ₹5k for semi-urban, ₹2.5k for rural).
- Penalties for falling below MAB: the lower of 6% of shortfall or ₹500.
- Exemptions: Salary accounts, senior citizens (above 60), PMJDY, BSBDA accounts, students from 1,200 institutes, and differently-abled customers are spared MAB enforcement.
Community Reaction & Financial Impact
Customers and influencers criticized the initial hike as exclusionary to common middle-class savers.
- Public sector banks like SBI, PNB, and Bank of Baroda either waived MAB or rationalized penalties, making the MAB hike stand out starkly.
- Investors are taking note: Following the rollback, ICICI Bank’s share price and market performance drew close attention.
This rapid U-turn reflects how critical public sentiment is in influencing financial policy—even for major private institutions.
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Understanding MAB: Calculation and Implications
MAB is the simple average of daily closing balances over a calendar month.
Example: If the sum of all day-end balances over a 30-day month is ₹450,000, MAB = 450,000 ÷ 30 = ₹15,000.
Important:
Customers don’t need to maintain the MAB daily; it’s the monthly average that matters.
Falling short triggers a penalty, calculated as above.
How Does This Compare Across Banks?
Public Sector Banks like SBI, Canara Bank, Union Bank—many removed MAB requirements entirely to promote financial inclusion.
Other Private Banks:
- HDFC Bank set MAB around ₹25,000—still distressingly high for many urban customers.
- ICICI, after rollback, now lies slightly above mid-range but more reasonable than earlier.
- The new revised norms strike a balance between deposit stability and customer affordability.
What Customers Should Do Now
- Review MAB Requirements based on your branch location (metro, semi-urban, rural).
- Open or maintain accounts only if you’re comfortable maintaining the revised balance.
- Choose exempt categories: if applicable, opt for salary, PMJDY, or senior savings accounts for zero MAB.
- Avoid penalties by keeping buffer balance each month or closing non-feasible accounts.
- Consider alternative banks with lower or no MAB requirements if applicable (especially for small savers).
Frequently Asked Questions (FAQ) – ICICI Bank Minimum Balance Limit Update 2025
Q1. What is the new minimum balance requirement in ICICI Bank savings accounts?
Ans: As per the latest update, ICICI Bank has reduced the minimum balance limit to ₹15,000 for most savings accounts. For rural accounts, the minimum balance requirement is now only ₹2,500.
Q2. When was this new minimum balance rule announced?
Ans: ICICI Bank announced the new minimum balance structure 4 days after increasing the limit to ₹50,000. The new rule is effective from August 2025.
Q3. Does this change apply to all types of savings accounts?
Ans: No, the revised minimum balance limit applies to regular savings accounts. Some premium accounts, NRI accounts, and salary accounts may have different requirements or may not require a minimum balance at all.
Q4. What happens if I don’t maintain the required minimum balance?
Ans: If the required balance is not maintained, ICICI Bank may charge a penalty fee, which varies depending on your account type and branch location.
Q5. How much is the penalty for not maintaining the minimum balance in ICICI Bank?
Ans: The penalty can range between ₹100 to ₹600 per month, depending on the shortfall amount and the branch category (Metro, Urban, Semi-Urban, or Rural).
Q6. Why did ICICI Bank reduce the minimum balance requirement?
Ans: The reduction aims to make banking more accessible, especially for rural customers and those with low-income savings accounts, encouraging more people to maintain active accounts.
Q7. Is there any minimum balance requirement for salary accounts in ICICI Bank?
Ans: No, salary accounts in ICICI Bank generally do not require a minimum balance as long as the monthly salary is credited regularly.
Q8. Can I change my ICICI Bank account type to avoid the minimum balance requirement?
Ans: Yes, customers can request to convert their account to a zero-balance account type, such as a Basic Savings Bank Deposit Account (BSBDA), if they meet the eligibility criteria.
Q9. How can rural customers maintain only ₹2,500 in their ICICI Bank accounts?
Ans: Rural account holders automatically get the reduced minimum balance limit if their account is linked to a branch classified as rural by ICICI Bank.
Q10. Where can I check my ICICI Bank account’s minimum balance requirement?
Ans: You can check your account details, including the minimum balance limit, via ICICI Bank’s internet banking, mobile banking app, or by visiting the nearest branch.
Disclaimer
The information provided in this article about ICICI Bank’s minimum balance limit changes is based on publicly available data, official announcements, and credible news sources as of the date of publication. Banking rules, minimum balance requirements, and related charges are subject to change at the discretion of the bank and as per Reserve Bank of India (RBI) guidelines. Readers are advised to verify the latest updates by visiting the official ICICI Bank website or contacting their nearest branch before making any financial decisions. The author and publisher are not responsible for any losses or damages arising from the use of the information provided in this article.
