ICICI Bank Raises Minimum Balance Fivefold; RBI Clarifies It’s Banks’ Decision

Amid ICICI Bank’s bold move to raise its minimum balance requirement fivefold, RBI Governor Sanjay Malhotra emphasised that such decisions lie with the banks themselves—not the central bank. This clarification aims to centre regulatory responsibility back with individual lenders and clear the air on policy boundaries. 

Individual banks are free to choose the minimum average balance (MAB) criteria for savings accounts, says the apex bank of India. To encourage financial inclusion, many state-owned banks, including SBI, PNB, Canara Bank, and Indian Bank, are doing away with fines for failing to maintain minimum balances, while other private banks, such as ICICI Bank, are raising MAB.

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ICICI Bank Raises MAB for New Accounts

Effective 1 August 2025, ICICI Bank has increased its minimum average balance (MAB) rules for new savings account holders. In metropolitan and urban branches, the new threshold is now ₹50,000—up from ₹10,000. Semi-urban branches must now maintain ₹25,000, up from ₹5,000, while rural branches see their requirement rise to ₹10,000 from ₹2,500. Notably, salary accounts and existing customers remain unaffected. 

RBI Governor Clarifies Regulatory Boundaries

When asked about ICICI’s policy shift, Governor Malhotra stated that the RBI does not set these balance requirements. "Every bank has its minimum balance requirement. This is not under any regulatory domain," he said, underlining the central bank’s hands-off stance on such matters. 

Market Reaction

The announcement had an immediate effect—ICICI Bank shares dipped by about 1–1.2%, reflecting concerns from investors over potential customer attrition and reduced accessibility for new savers. 

'Bank Bachao Desh Bachao Manch', a civil society group, has written to the Finance Ministry, pleading with it to step in and overturn the ruling. "The inclusive banking principle is undermined by this retrograde decision," stated Soumya Datta and Biswaranjan Ray, the organisation's co-conveners.

Talking to X (formerly Twitter) - Jay Kotak, the co-head of Kotak811, highlighted that the majority of Indians make less than ₹25,000 per month. This means that they will either have to lock up almost all their monthly income with the bank or risk fines. 

Conclusion

By formally distancing itself from ICICI Bank’s new minimum balance policy, the RBI Governor has made clear that banks bear the responsibility for customer-facing metrics like MAB. With the private lender shifting focus toward higher-balance customers, observers will now watch whether others follow and how customers react. ICICI Bank remained unaffected, closing the day flat on the BSE at ₹1,436.70 after trading in a narrow range of ₹1,419.85-1,438.80. Over the last two weeks, the stock has dropped 3.49%, while the BSE Bankex and BSE Sensex have gained 1.13% and 0.93%, respectively.