India’s second-largest private sector bank, ICICI Bank, has significantly increased the minimum balance requirement for its savings accounts, with the new rules effective from August 1.
Under the revised guidelines, account holders in metro and urban areas must now maintain an average monthly balance of Rs 50,000, up from the earlier Rs 10,000.
The revised minimum balance requirements are as follows:
- Rs 50,000 in metro and urban areas
- Rs 25,000 in semi-urban areas
- Rs 10,000 in rural areas
Non-compliance to attract fines
Failure to maintain the required balance may attract penalties. Customers who do not maintain the minimum average balance will be levied a penalty at 6 per cent of the shortfall or Rs 500, whichever is lower.
With this move, ICICI has become the bank requiring the highest minimum account balance (MAB) among domestic banks.
Minimum account balance rule for other banks
The State Bank of India, the country's largest public sector lender, eliminated the requirement for maintaining a minimum balance in savings accounts in 2020. However, most other banks still require customers to maintain a minimum balance ranging from Rs 2,000 to Rs 10,000 to cover operational expenses.
For example, HDFC Bank, the leading private sector bank in India, mandates a minimum balance of Rs 10,000 for savings accounts in metro and urban branches, Rs 5,000 for semi-urban branches and Rs 2,500 for rural branches.
For Axis Bank, the minimum balance norm for metro and urban branches is Rs 12,000, while for semi-urban and rural branches is Rs 5000 and Rs 2500 respectively.
Earlier in April this year, ICICI Bank slashed the interest rate on its savings accounts by 0.25 per cent. This move came after similar rate cuts were introduced by HDFC Bank and Axis Bank.
