ICICI Bank converts recent changes to minimum balance rules; these account holders no longer need to maintain an average of Rs 50,000

ICICI Bank rose sharply on Wednesday in the minimum balance requirement for its savings account holders. The development follows a objection to certain revisions to the minimum balance rule for private lenders, requiring clients to hold accounts in subway and city branches to maintain a monthly average of Rs 50,000, despite certain conditions.

Now, with the entry into force on August 1, the new ICICI bank savings account will attract a minimum balance requirement of Rs 15,000 in its subway and urban locations, which is Rs 7,500 in its subway areas, with a balance of Rs 7,500 in the semi-urban area, and Rs 2,500 in people in rural areas of the country.

This week, the bank raised those requirements to Rs 50,000, Rs 25,000 and Rs 10,000, respectively.

The bank has drawn opposition from customers for raising the minimum balance rule, with users criticizing lenders’ policies through social media.

The revised rules will also come into effect on August 1.

What is the minimum average balance (MAB) rule?

Customers who will now need to run savings accounts in credit branches in metro or city locations will maintain at least Rs 15,000 in their accounts to avoid any fines, the ICICI bank portal said.

Similarly, the restrictions for those who hold accounts in semi-urban and rural branches of the bank are Rs 7,500 and Rs 2,500, respectively.

What will happen to account holders who fail to meet the mark?

According to the bank, failing to comply with the minimum balance rule will result in a 6.0% fine of the shortfall between the actual balance and the required average or Rs 500 (whichever is lower).

RBI’s opinion on the minimum balance rule for commercial banks

RBI Governor Sanjay Malhotra said in an interaction with reporters this week that commercial banks are free to decide the minimum balance for their savings account holders.

He also clarified that this aspect of savings accounts does not fall under the regulatory framework.

Do all ICICI banking customers have to meet the new minimum balance requirements?

Meanwhile, according to ICICI Bank, the following accounts continue to be exempt from required waivers:

• Payroll Account
• Retirement Account
• Student Savings Account (Students at a specific institution)
• PMJDY accounts and other special accounts
• Clients maintain Rs 2 million in savings and fixed deposits