ICICI Bank revises minimum balance requirements: What are the new rules?

By Admin

14 Aug, 2025

Introduction
ICICI Bank has revised its minimum account balance (MAB) requirements after facing widespread backlash over a steep hike announced earlier this year. The bank had increased the MAB for new savings accounts in metro and urban locations to ₹50,000, but following “valuable feedback” from customers, the requirement has now been significantly reduced.

Understanding Minimum Average Balance (MAB)
The Minimum Average Balance is the average amount that an account holder is required to maintain in their bank account during a month. If the balance falls short of the required MAB, the bank imposes a penalty. For ICICI Bank savings accounts, the interest rate is currently 2.5% per annum.

Revised MAB for ICICI Bank Savings Accounts
The updated requirements, effective for accounts opened on or after August 1, 2025, are as follows:

• Metro and Urban Locations: Reduced from ₹50,000 to ₹15,000.
  
  

• Semi-Urban Locations: Increased from ₹5,000 to ₹7,500.
  
  

• Rural Locations: Increased from ₹5,000 to ₹2,500.
  
  

Even with this rollback, the bank has implemented a 50% hike in MAB for semi-urban and rural branches compared to pre-August levels.

Exemptions from MAB Requirements
The revised MAB rules do not apply to:

• Salary accounts
  
  

• Senior citizens/pensioners (above 60 years)
  
  

• Basic Savings Bank Deposit Account / PM Jan Dhan Yojana accounts
  
  

• Accounts for people with special needs
  
  

• Savings accounts opened before July 31, 2025
  
  

Why the Revision Happened
The initial hike to ₹50,000 for metro and urban accounts sparked criticism, with many customers especially young urban professionals arguing that they would prefer to invest that amount rather than keep it idle in a low-interest bank account. The public outcry prompted ICICI Bank to revisit its policy and announce the rollback.

Penalties for Not Maintaining MAB
If customers fail to maintain the required MAB, they will be charged a penalty of 6% of the shortfall amount or ₹500, whichever is lower.

Industry Context
Interestingly, this move by ICICI Bank comes at a time when several public sector banks, including State Bank of India, Punjab National Bank, Canara Bank, and Indian Bank, have waived penalties for non-maintenance of MAB in savings accounts altogether. The government has also highlighted that most PSBs are eliminating or rationalising MAB rules to promote financial inclusion.

Conclusion
While ICICI Bank’s revision to the MAB requirements offers relief to many customers, it still represents a notable increase compared to earlier norms for semi-urban and rural locations. The change underscores the importance of customer feedback in shaping banking policies, even as competition from public sector lenders pushes private banks to reassess their charges and requirements.