ICICI Bank has recently updated its minimum balance rules for various customer segments. Urban and metro account holders now need to maintain a minimum balance of ₹15,000. For semi-urban customers, the requirement is reduced to ₹7,500, and for rural customers, it is set at ₹2,500. These changes come after a backlash from customers and industry experts regarding a previous hike that raised the minimum average monthly balance from ₹10,000 to ₹50,000. This initial increase aimed to attract premium customers but faced criticism for being unrealistic and discriminatory.
The new rules will not affect salary accounts, senior citizens and pensioners over 60 years, basic savings bank deposit accounts, Jan Dhan accounts, or accounts for individuals with special needs. Pensioners below 60 years and students from 1,200 selected institutions are also exempt from maintaining any minimum balance. If account holders fail to meet the new requirements, they will incur a penalty of 6% of the shortfall or ₹500, whichever is lower.
ICICI Bank stated that these changes aim to better align with customer expectations and preferences. The previous decision to increase the minimum balance requirement drew significant criticism. Many argued that a large portion of the population earns less than ₹25,000 a month, making it difficult for them to meet such high balance demands.
The Reserve Bank of India (RBI) has chosen not to intervene in this matter. RBI Governor Sanjay Malhotra mentioned that it is not within the RBI’s domain to dictate such requirements, allowing banks the freedom to set their own criteria.
Interestingly, this development occurs as many public sector banks are removing minimum balance requirements altogether. For instance, the State Bank of India eliminated its minimum balance mandate in 2020, allowing all regular savings accounts to operate with a zero balance. Recently, other banks like Canara Bank, Bank of Baroda, Indian Bank, and Punjab National Bank have also scrapped such rules, focusing on customer convenience and financial inclusion.
ICICI Bank’s decision to lower its minimum balance requirements is a significant shift in its banking policy. It seems to reflect a broader trend in the banking industry towards more customer-friendly policies. The bank’s shares did experience a slight decline following the announcement, but the reaction from customers has largely been positive.
The bank’s previous increase in the minimum balance requirement had set a steep benchmark in the industry. The revised minimum balance now stands at ₹15,000 for urban and metro customers, while semi-urban and rural customers have lower thresholds of ₹7,500 and ₹2,500, respectively. This 50% reduction still leaves the new requirements higher than they were before the hike but is seen as a step toward a more reasonable standard.
The bank also clarified that these new minimum balance requirements apply only to accounts opened after August 1, 2025. Customers who do not maintain the required balance will be subject to the penalty charges mentioned earlier. However, the bank has assured that customers under specific programmes, such as Family Banking, may have different requirements based on combined balances.
Overall, ICICI Bank’s revised rules aim to balance customer needs with the bank’s operational requirements. The move reflects an awareness of the financial challenges many customers face, particularly in a country where a large percentage of the population struggles with financial stability. As banks continue to adapt to customer feedback, it will be interesting to see how this trend develops in the coming months and years.