ICICI Bank, one of India’s largest private sector banks, has announced a significant change to its savings account policy. The ICICI Bank minimum balance requirement has been increased substantially, making it important for every customer to understand what this means for their finances.
The new rules, which affect customers across metro, urban, semi-urban, and rural branches, could impact millions of account holders. In this detailed guide, we will explore the revised ICICI Bank minimum balance requirements, the penalties for non-compliance, and the possible alternatives for those who may struggle to meet these thresholds.
The Big Change in ICICI Bank Minimum Balance Requirements
ICICI Bank has revised the minimum average balance (MAB) required in savings accounts. For customers living in metro and urban areas, the ICICI Bank minimum balance has been raised from ₹10,000 to ₹50,000 – a fivefold increase.
Changes by Location
- Metro & Urban Branches: From ₹10,000 to ₹50,000
- Semi-Urban Branches: From ₹5,000 to ₹25,000
- Rural Branches: From ₹2,500 to ₹10,000
These changes apply to all regular savings accounts unless the account type is specifically exempt (such as basic savings bank deposit accounts).
What Does This Mean for Account Holders?
For many customers, especially those from semi-urban and rural areas, the steep hike in the ICICI Bank minimum balance could be challenging. Those who fail to maintain the required average balance risk paying penalty charges, which could add an extra burden to low-income account holders.
Impact on Metro and Urban Customers
In metro cities, the jump from ₹10,000 to ₹50,000 is substantial. While urban account holders may have higher incomes, this change could still affect individuals with multiple accounts or those who use their ICICI account for limited transactions.
Impact on Semi-Urban and Rural Customers
In semi-urban areas, the requirement has increased fivefold (from ₹5,000 to ₹25,000), while in rural areas, it has risen from ₹2,500 to ₹10,000. This could lead many to consider other banks with lower minimum balance rules.
Penalty for Non-Maintenance of ICICI Bank Minimum Balance
ICICI Bank will levy a penalty if the account holder fails to maintain the required balance. The penalty will be:
- 6% of the shortfall OR
- ₹500, whichever is lower.
For example:
If you are in a metro branch and your balance falls short by ₹20,000, the penalty would be ₹1,200 (6% of ₹20,000). However, since ₹500 is lower, you will be charged ₹500 instead.
Possible Ways to Avoid Penalty
Maintaining the new ICICI Bank minimum balance could be difficult for many, but there are strategies to avoid charges.
Opt for a Basic Savings Bank Deposit Account (BSBDA)
These accounts do not have a minimum balance requirement and can be a great alternative for those who cannot maintain a higher MAB.
Shift to Family Banking
ICICI Bank offers family banking, where multiple accounts are linked to meet a combined balance requirement. However, the requirement is 1.5 times the individual criteria, and if this is not met, penalties are applied to individual members.
Consolidate Funds into Fewer Accounts
If you have accounts in multiple banks, consolidating funds into fewer accounts can help you maintain the required ICICI Bank minimum balance without stretching your finances.
Additional Charges Customers Should Know
Aside from non-maintenance charges, ICICI Bank has also introduced fees for other services:
- ECS/NACH debit return due to insufficient funds: ₹500 per instance, capped at three times per month per mandate.
- Family banking shortfall: Non-maintenance charges will be applied to individual accounts.
Why Did ICICI Bank Increase the Minimum Balance?
While ICICI Bank has not explicitly stated the reason for this steep hike, banking experts believe it is due to:
- Increasing operational costs
- Need for higher liquidity in the bank
- Aligning with certain premium account benefits
However, this has raised concerns among customers, as many feel the ICICI Bank minimum balance should remain affordable for all segments.
How Does ICICI Bank Compare with Other Banks?
When compared to other major banks in India, ICICI Bank’s new minimum balance is among the highest.
| Bank Name | Minimum Balance (Metro) |
|---|---|
| ICICI Bank | ₹50,000 |
| HDFC Bank | ₹10,000 |
| SBI | ₹3,000 |
| Axis Bank | ₹12,000 |
The new ICICI Bank minimum balance places it in the premium category, which might prompt customers to consider competitors.
Will This Affect Customer Loyalty?
Yes, there’s a possibility that this change will push customers toward banks with more lenient rules. Many might also switch to digital banks and small finance banks that have low or zero minimum balance requirements.