ICICI Bank has sharply increased the minimum average monthly balance (MAMB) requirement for new savings accounts opened on or after August 1, 2025. For customers in metro and urban areas, the MAMB has been raised fivefold to ₹50,000 from the earlier ₹10,000. In semi-urban branches, it has gone up to ₹25,000 from ₹5,000, and in rural branches, the requirement has doubled to ₹10,000 from ₹5,000.

The bank said its decision to implement location-based minimum balance requirements reflects the varying economic realities across India. Customers in metro and urban regions, who typically have higher incomes and broader banking relationships, are considered better placed to meet the higher thresholds compared to those in rural areas.

Until July 31, 2025, the minimum monthly average balance (MAB) for ICICI Bank savings accounts was ₹10,000 across most categories. The latest move significantly raises the entry threshold for new account holders.

What has RBI said in response to ICICI

Reserve Bank of India (RBI) Governor Shaktikanta Das on August 11 clarified that the matter does not fall “under any regulatory domain.” Speaking about ICICI Bank’s hike in the minimum balance requirement for non-salary accounts, Das noted that the RBI has left it to individual banks to set their own minimum balance policies.

“Every bank has its own minimum balance requirement. Some banks have kept it at ₹10,000, some at ₹2,000, and some have even waived it. This is not in the RBI’s regulatory domain,” RBI Deputy Governor Swaminathan J. Malhotra said on the same day.

The RBI’s stance underscores that such decisions are part of banks’ commercial strategies, allowing them to independently determine MAB thresholds without regulatory intervention.

Jay Kotak criticises move

The sharp hike has drawn criticism from several quarters, including Jay Kotak, son of Kotak Mahindra Bank founder Uday Kotak. On social media platform X (formerly Twitter), Kotak called the move impractical for India’s vast middle class.

“Every Indian must access our financial sector. 90% of India makes less than ₹25,000 a month. A ₹50,000 minimum balance implies a sum equal to around 94% of Indians’ monthly income is to be left with the bank at all times, else a fee!” Kotak wrote.

He also expressed his preference for digital banking and the growing fintech ecosystem over traditional banks, arguing that fintech players offer more inclusive and accessible financial services without such steep deposit requirements.

Kotak’s comments have amplified concerns that the higher MAMB could exclude lower and middle-income individuals from mainstream banking, pushing them towards alternative financial channels.