ICICI Bank Raises Minimum Balance Requirement for Savings Accounts from ₹ 10,000 to ₹50,000: Implications Explored
ICICI Bank Increases Minimum Balance Requirements: Impact on Customers and Alternatives
ICICI Bank has announced changes to its minimum balance requirements for savings account holders, causing concern among customers, particularly those in rural and semi-urban areas. The new requirements, which come into effect for accounts opened after August 1, 2025, are significantly higher than previous limits.
The minimum balance for rural area account holders has been increased from ₹2,500 to ₹10,000. For those residing in metro and urban areas, the minimum balance has been raised from ₹10,000 to ₹50,000, while in semi-urban areas, it has been increased from ₹5,000 to ₹25,000.
This hike has sparked potential financial strain for many account holders, as the new minimum balances exceed average income levels for many Indians. For instance, the monthly average balance of ₹50,000 exceeds India's average monthly income, which is approximately ₹33,000.
However, following a widespread customer backlash, ICICI Bank has revised the minimum balance requirements to more moderate levels. The new requirements stand at Rs 15,000 for metro/urban, Rs 7,500 for semi-urban, and Rs 2,500 for rural accounts.
Customers who fail to maintain the minimum balance will be charged 6% of the shortfall or ₹500, whichever is lower, as a penalty. This penalty will be levied on individual members in family banking who do not maintain the minimum average balance. However, penalty charges will be waived if account holders meet the enrolled program criteria.
For customers struggling to meet the new requirements, alternatives are available. These include switching to banks with lower or no minimum balance requirements, such as State Bank of India, which has eliminated minimum balance penalties altogether. Opting for basic savings accounts or specific salary accounts, which often do not require maintaining minimum balances, is another option.
Additionally, considering digital or youth-focused accounts from other banks, such as HDFC Bank’s DigiSave Youth Account with lower MAB requirements, could be a more affordable choice.
The hike and subsequent revision highlight a possible trend toward premium account products with higher maintenance criteria in private banks, which might limit banking options for lower-income customers in urban and semi-urban areas. Pensioners are exempt from the family banking minimum average balance requirement.
The bank will also charge ₹500 per instance for ECS/ NACH debit returns due to financial reasons, with a cap of three charges per month.
In conclusion, the impact of ICICI Bank's increased minimum average balance requirements revolves around increased risk of penalties and possible exclusion of some customers due to high balance demands. Customers should consider switching banks or account types more suited to their financial capacity to mitigate these effects.
- The increased minimum balance requirements for ICICI Bank's savings accounts, which range from Rs 2,500 for rural accounts to Rs 50,000 for metro/urban accounts, surpass the average monthly income of many Indians, potentially straining the finances of account holders.
- For customers finding it difficult to meet ICICI Bank's revised minimum balance requirements, alternatives such as switching to banks with lower or no minimum balance requirements, opting for basic savings accounts or specific salary accounts, or considering digital or youth-focused accounts from other banks, could be more financially viable options.
