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New Delhi, August 9 (IANS) India’s second largest lender ICICI Bank has raised the monthly minimum average balance requirement for all customer segments, effective August 1.
Customers at metro and urban locations who opened their savings accounts on or after August 1 have to maintain Rs 50,000 monthly average balance to avoid penalties, according to the latest notification on the bank's website.
The minimum average balance for older customers remains Rs 10,000.
New customers in semi-urban locations will be required to maintain a minimum average balance of Rs 25,000 and rural customers will have to maintain Rs 10,000.
The minimum average balance remains at Rs 5,000 a month for old customers in rural and semi urban areas.
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.
The bank now allows three complementary cash deposits free of cost into your savings account, after which you have to pay Rs 150 per transaction.
The cumulative value limit is Rs 1 lakh per month. In April 2025, ICICI Bank reduced the interest rate on its savings accounts by 0.25 per cent, and savings bank accounts with deposits up to Rs 50 lakh will now earn 2.75 per cent interest.
The number of complementary cash withdrawal transactions per month also remains three.
The third-party cash deposit of Rs 25,000 per transaction is applicable for all savings accounts.
The hike in minimum average balance by a large private lender is in contrast to other banks that have rationalised their penalties.
The country’s largest lender, State Bank of India (SBI), had scrapped the minimum balance rule in 2020.
The majority of other banks maintain significantly lower thresholds, typically between Rs 2,000 and Rs 10,000.
Explained: All about ICICI Bank's significant minimum average balance hike
ICICI Bank on Saturday raised the minimum average balance (MAB) requirement for its savings accounts, with significant hikes for new and urban customers in metro cities.
Customers of metro and urban branches must maintain a minimum average balance of Rs 50,000 under the new structure -- up from the earlier limit of Rs 10,000. The change applies only to the new customers who have been acquired since August 1, 2025.
Semi-urban customers are required to maintain Rs 25,000, while rural customers need Rs 10,000 in their accounts to stay clear of penalties.
Customers who fail to meet the new MAB requirement will face non-maintenance penalties. The penalty is 6 per cent of the shortfall from the required MAB or Rs 500, whichever is lower.
Minimum Average Balance is the minimum monthly average that account holders must maintain to avoid penalty charges. Banks calculate MAB by adding the closing balance in your account for each day of the month and dividing the total by the number of days in that month. So, consumers must devise a method to ensure that the sum of their daily balances is at least Rs 15 lakh.
For example, suppose your MAB requirement is Rs 50,000 for a 30-day month. If you keep Rs 50,000 in the account every day, your MAB will be exactly Rs 50,000.
If you keep Rs 15 lakh for just one day and zero balance for the remaining month, your MAB will still be: Rs 15,00,000 divided by 30 = Rs 50,000. This method is suitable for customers who prioritise liquidity over locking Rs 50,000 in their account for the entire month.
Suppose you are a middle-income customer who receives a regular salary of Rs 7.5 lakh on the first of each month. If you maintain Rs 7.5 lakh in your account for two days, the MAB requirements will be satisfied, after which you can pay your EMI or monthly rent. So time your payments in advance, keeping MAB requirements in mind.
Consider linking a fixed deposit to your savings account through a sweep-in facility, and once you have met your MAB requirements, sweep in the excess to your FD account to gain higher interest. Customers can also consider switching to a zero-balance or low-MAB account offered by some banks.
For instance, the State Bank of India (SBI) had scrapped the minimum balance rule in 2020. The majority of other banks maintain significantly lower thresholds, typically between Rs 2,000 and Rs 10,000.
