In a surprising decision, ICICI Bank, India’s second-largest private bank, has jacked up the minimum average balance (MAB) for new savings accounts opened on or after August 1, 2025, to a staggering ₹50,000—a five-fold increase from the earlier ₹10,000. This move, which has raised eyebrows across the financial sector, comes as public sector banks like State Bank of India are scrapping such requirements altogether.
For customers in semi-urban areas, the MAB has jumped from ₹5,000 to ₹25,000, while those in rural areas now face a new MAB of ₹10,000, up from ₹2,000. If account holders fail to maintain these balances, they’ll face a penalty of 6% of the shortfall or ₹500, whichever is lower. For example, if your urban account balance dips ₹10,000 below the required ₹50,000, you’ll pay a ₹500 fine, as it’s capped below the calculated ₹600 penalty.
Who’s Affected and Who’s Exempt?
The new MAB applies only to new savings accounts opened on or after August 1, 2025. Existing customers can breathe easy, as they’ll stick to the old MAB requirements—₹10,000 for urban, ₹5,000 for semi-urban, and ₹2,000 for rural accounts. Salary accounts, PM Jan Dhan accounts, and basic savings bank deposit accounts remain zero-balance accounts, exempt from these rules.
What’s in It for Account Holders?
ICICI Bank is sweetening the deal for those meeting the higher MAB. New account holders get perks like free NEFT fund transfers, three free cash transactions per month (with ₹150 per transaction thereafter, plus GST), and a 2.5% annual interest rate on savings balances. Some fees previously applied to savings accounts, such as charges for IMPS transactions, have also been waived for these accounts.
Why the Hike?
The timing of this move is puzzling, as public sector giants like State Bank of India, Punjab National Bank, Canara Bank, and Indian Bank have either slashed or eliminated MAB penalties to make banking more accessible. Industry insiders speculate ICICI’s strategy is to boost its current and savings account (CASA) ratio and cut operational costs by targeting higher-value customers. Critics, however, argue this could push middle- and lower-income customers toward competitors with no or lower MAB requirements.
Social Media Backlash
The announcement has sparked a storm online, with customers venting frustration. “₹50,000 is insane for a savings account!” one X user posted. Another quipped, “Time to switch to SBI or other banks with zero-balance options.” The hike, the first in over a decade, stands out under CEO Sandeep Bakhshi’s low-key leadership, which has typically focused on digital innovation and risk management.
As ICICI Bank redefines its savings account strategy, the question remains: will this bold move pay off, or will it drive customers to friendlier banking options?
