Synopsis
ICICI Bank has significantly lowered its minimum average balance requirement for savings accounts, responding to customer feedback. The revised MAB now stands at Rs 15,000 for metro and urban areas, with lower thresholds for semi-urban and rural locations. This decision contrasts with moves by several state-owned banks to eliminate such penalties altogether, while HDFC Bank maintains its existing balance norms.
ReutersICICI Bank, India’s second-largest private sector lender, has reduced the minimum average balance (MAB) requirement for savings accounts to Rs 15,000 from the Rs 50,000 it had announced earlier this month. The bank said the decision followed feedback from customers.
“We had introduced new requirements for the Monthly Average Balance (MAB) for new savings accounts opened from August 1, 2025,” a notification on the ICICI Bank website said. “Following valuable feedback from our customers, we have revised these requirements to better reflect their expectations and preferences.”
Under the revised structure, the minimum average balance for metro and urban locations is now Rs 15,000, down from Rs 50,000 earlier. For semi-urban locations, the requirement has been cut to Rs 7,500 from Rs 25,000, while for rural areas it has been reduced to Rs 2,500 from Rs 10,000. Customers who fail to maintain the stipulated balance will incur a penalty of 6% of the shortfall or Rs 500, whichever is lower.
At a recent public event, RBI Governor Sanjay Malhotra had said that the decision on setting minimum average balance requirements rests entirely with individual banks and does not fall within the central bank’s regulatory ambit.
“The Reserve Bank of India has left it to the banks to decide the quantum of minimum average balance,” Malhotra had said. “Some banks have capped it at Rs 10,000, others at Rs 2,000, and some have done away with it altogether.”
Meanwhile, HDFC Bank said it has not changed its average monthly balance norms. The AMB for regular savings accounts remains Rs 10,000, while for the Savings Max account it is Rs 25,000.
This development comes as several state-owned banks move in the opposite direction, scrapping penalties for non-maintenance of minimum balances to promote financial inclusion. State Bank of India was the first to do so, followed in recent months by Punjab National Bank, Canara Bank, and Indian Bank.
In contrast, most private sector banks continue to levy charges—typically 6% of the shortfall in the required minimum average balance or Rs 500 per quarter, whichever is lower. Many lenders have also reduced interest rates on savings deposits in recent months to protect their margins amid shifting market conditions.