ICICI Bank Increases Minimum Balance Requirement for New Account Holders: Implications Explained
In a move that may impact millions of customers, ICICI and HDFC Bank have announced new minimum average monthly balance (MAMB) requirements for savings accounts opened from August 1, 2025. These changes come following a trend in the banking sector, with some banks aiming to encourage higher account activity and generate more revenue.
ICICI Bank initially proposed a significant increase in MAMB, setting the new requirements at Rs 50,000 for metro/urban branches, Rs 25,000 for semi-urban, and Rs 10,000 for rural areas. However, after receiving customer feedback, the bank has revised these figures, reducing them to Rs 15,000 (metro/urban), Rs 7,500 (semi-urban), and Rs 2,500 (rural).
HDFC Bank, on the other hand, has increased the MAMB to Rs 25,000 for metro/urban branches for new accounts opened from August 1, 2025, while maintaining the previous requirements of Rs 5,000 for semi-urban and Rs 2,500 for rural branches.
State Bank of India (SBI) and some other public sector banks have taken a different approach, doing away with minimum balance requirements and penalties entirely for savings accounts to promote financial inclusion.
The new MAMB requirements for various banks are as follows:
| Bank | Metro/Urban Branches | Semi-Urban Branches | Rural Branches | |--------------------|---------------------|--------------------|-------------------| | ICICI Bank | Rs 15,000 | Rs 7,500 | Rs 2,500 | | HDFC Bank | Rs 25,000 | Rs 5,000 (unchanged) | Rs 2,500 (unchanged) | | State Bank of India (SBI)| No minimum balance (zero balance facility) | No minimum balance | No minimum balance |
Customers who fail to meet the new MAMB requirements will face a penalty. The penalty usually involves a charge calculated as 6% of the shortfall or a fixed lower amount (e.g., Rs 500 or Rs 600), except for exempt categories like salary accounts and basic savings accounts in some banks.
These changes apply only to new savings accounts opened from August 1, 2025; existing accounts generally continue under prior terms. The Reserve Bank of India does not regulate minimum balance amounts but leaves this decision to individual banks.
It's important to note that the average monthly income in India is approximately Rs 33,000. With the new MAMB requirements for ICICI and HDFC Bank exceeding this average, lower-income customers in the private banking sector may have fewer options if more banks follow this trend.
For HDFC's DigiSave Youth Account, the minimum average monthly balance requirement is Rs 5,000 in metro and urban areas and Rs 2,500 in semi-urban areas.
These changes could potentially lead to premium account products becoming the norm in urban centers, as customers may be encouraged to opt for these accounts to avoid penalties and maintain the required balance. It remains to be seen how these changes will impact the banking sector and its customers in the long run.
In the evolving personal-finance landscape, ICICI Bank adjusts its savings account minimum average monthly balance (MAMB) requirements following received feedback, setting new figures at Rs 15,000 (metro/urban), Rs 7,500 (semi-urban), and Rs 2,500 (rural), while HDFC Bank maintains higher MAMB at Rs 25,000 (metro/urban), Rs 5,000 (semi-urban), and Rs 2,500 (rural) for new accounts. These changes could influence business strategies, as lower-income customers in the private banking sector may find fewer suitable options, particularly as more banks adhere to this trend.
