ICICI Bank Lowers Minimum Balance Requirement for New Savings Accounts
In India, millions of us open savings accounts every year to keep our money safe and earn a little extra interest. But for many, the “minimum balance” rule has always been a hurdle. ICICI Bank, one of the country’s largest private banks, has now taken a big step to make banking easier. They’ve lowered the minimum balance requirement for new savings accounts.
This might seem like a small change, but it can make a huge difference. We no longer need to worry about locking away a large sum just to keep an account active. For students, new professionals, and people in smaller towns, this move opens the door to more accessible banking. It also shows how banks are competing to offer better terms and attract customers.
Let’s explore what this change means for us, why ICICI made the move, and how it can shape the way we manage our money.
Background: Minimum Balance in Indian Banking
A minimum average balance (MAB) is the average amount a customer must keep in a savings account each month. Banks set MAB based on location and account type. Private banks often set higher MABs in metro and urban areas. Public banks keep them lower or even nil for basic accounts. For instance, the State Bank of India lists “Monthly Average Balance: NIL” for its standard savings account. Its Basic Savings Bank Deposit (BSBD) account also has a zero balance.
Private banks adjust MABs to manage operating costs and maintain deposits. In August 2025, ICICI Bank sharply increased MAB for new accounts. After public criticism, it reversed the change. At the same time, HDFC Bank’s MAB rules drew attention. Reports showed higher MAB for some new accounts, but unchanged terms for older regular accounts. This shows how MABs can differ greatly depending on the bank, account product, and customer group.
Details of ICICI Bank’s New Policy
ICICI Bank has reduced the MAB for new savings accounts opened on or after August 1, 2025. The website now shows: ₹15,000 for metro/urban, ₹7,500 for semi-urban, and ₹2,500 for rural. Earlier, the bank had set much higher figures, including ₹50,000 for metro/urban. The rollback followed strong customer feedback. Multiple outlets confirm the change and the effective date.
Non-maintenance charges apply if the account falls short of MAB. ICICI discloses a penalty of 6% of the shortfall or ₹500, whichever is lower. Certain “programme” customers who meet eligibility criteria can get this charge waived. These rules are visible on ICICI’s site and summarized by major publishers.
Existing accounts keep earlier terms unless the bank notifies otherwise. Several reports stress the change targets for accounts opened from August 1, 2025.
Why did ICICI Change Course?
The first hike triggered widespread criticism. Social media and analysts argued the ₹50,000 MAB was too steep for many urban customers. Commentators said the rule ignored middle-class realities. Articles describe the bank’s response as a “rollback” after “backlash” and “customer feedback.” The new grid cuts the urban MAB to ₹15,000 and scales the rest accordingly.
Banks also face rising service costs and deposit competition. Adjusting MABs can balance fee income and customer growth. But too-high thresholds risk churn and reputational damage. The August reversal shows how quickly sentiment can shape policy.
Impact on Customers
Lower MABs reduce the cash “lock-in” for new customers. Urban account holders now need ₹15,000 on average, not ₹50,000. Semi-urban and rural customers see lighter targets too. This eases entry for students, gig workers, and first-time savers. It can also support digital use of UPI, debit card spending, and online transfers without a heavy balance burden.
There is still a cost for falling short. The penalty is 6% of the shortfall or ₹500, whichever is lower. Customers should track balances across the month rather than only at month-end. Programme ties (like family banking) can waive charges if criteria are met.
Industry Implications
ICICI’s reversal puts pressure on peers to clarify or recalibrate their own rules. Reports indicate HDFC Bank is communicating changes for some new accounts, while other pages show legacy thresholds unchanged for regular accounts. Public banks like SBI continue to attract customers with zero-balance options. This mix may widen product segmentation: premium programs with higher thresholds and mass-market accounts with low or nil MAB.
If more private banks lift MABs, expect louder comparisons to SBI and other low-MAB or zero-MAB players. That could influence switching, especially in metros.
Expert and Public Commentary
Banking commentators flagged the earlier ₹50,000 urban MAB as out of step with incomes. Public figures warned it could hit a large share of households. Coverage shows that sentiment, and the bank’s “customer feedback” framing of the rollback. Market watchers also note the stock could react to the policy U-turn.
Financial educators advise customers to read fee grids closely. They highlight how MAB penalties now use a clear formula. They also suggest comparing programs that can waive charges if eligibility is met.
How to Open a New ICICI Savings Account Under the Revised Rules
New customers can apply online via ICICI Bank’s savings account page or visit a branch. Standard KYC applies: identity proof, address proof, photographs, and PAN or Form 60 per norms. Digital account options allow quick onboarding with video KYC. The website’s FAQ lays out MAB slabs and non-maintenance charges, plus programme-based waivers.
Tips to Maximize the Benefits
Keep an eye on the monthly average, not just the closing day. Automate a small recurring transfer to keep the average above the slab. Use SMS or app alerts for low balance. If eligible, enroll in a programme that waives charges after meeting the combined balance rules. Review the fee schedule for ATM, cash deposit, and withdrawal limits to avoid service charges.
Wrap U
ICICI Bank’s cut to ₹15,000 MAB for new urban accounts, with lower slabs for semi-urban and rural, marks a quick reset after criticism. The penalty formula is now explicit, and programme waivers add flexibility. The move may nudge rivals to refine their own grids. Customers should confirm which rules apply to their account date and type, and use simple habits to avoid fees.
Frequently Asked Questions (FAQs)
Yes. As of 1 August 2025, ICICI Bank requires ₹15,000 in metro areas, ₹7,500 in semi-urban areas, and ₹2,500 in rural areas for new customers.
Yes, for most regular savings accounts. Some special or zero-balance accounts do not need it. Rules differ by bank and account type. Check your bank’s policy.
The bank will charge a penalty. ICICI Bank takes 6% of the shortfall or ₹500, whichever is less. This is applied each month when the balance is low.
Disclaimer:
This is for informational purposes only and does not constitute financial advice. Always do your research.