ICICI Bank Withdraws Rs 50,000 Minimum Account Balance Requirement Amid Backlash

ICICI Bank has withdrawn the requirement to maintain a minimum balance of Rs 50,000 for new accounts opened by metro and urban customers, according to a release issued by the private lender on Wednesday.

The minimum account balance requirement for urban and metro customers has now been revised to Rs 15,000.

Similarly, ICICI Bank has withdrawn the requirement for new semi-urban and rural customers to maintain a minimum balance of Rs 25,000 and Rs 10,000, respectively. Instead, they would now be required to maintain a minimum balance of Rs 7,500 and Rs 2,500, respectively.

These revisions have come after the private sector bank received customer and industry backlash for increasing its minimum average monthly basis requirements to Rs 50,000 from Rs 10,000 over the weekend. The bank had planned to tap premium customer base through its previous move.

The new revision does not apply to salary accounts, senior citizens and pensioners above 60 years, basic savings bank deposit accounts, Jan Dhan accounts, or accounts for people with special needs.

Pensioners below 60 years and students from 1,200 select institutions will be exempt from any minimum balance requirement.

Accounts not meeting the balance criteria will attract a penalty of 6% of the shortfall or Rs 500, whichever is lower.

The bank said the latest changes aim to "better reflect customer expectations and preferences."

The lender's earlier decision to raise minimum account balance had received much flak for being discriminatory. Jay Kotak, son of peer private sector bank's promoter Uday Kotak, said that 90% of Indians make less than Rs 25,000 a month.

So far, the Reserve Bank of India chose to steer clear of the controversy. Governor Sanjay Malhotra, while responding to a media query at an event, said that the matter does not fall under the regulator's domain, adding that banks in India have the freedom to decide the minimum balance they want.

This move by ICICI Bank had come at a time when a growing number of public sector banks have scrapped minimum balance requirements altogether.

State Bank of India, the country’s largest lender, removed its minimum balance mandate back in 2020, making all its regular savings accounts effectively zero-balance with no penalties.

In the last few months, Canara Bank, Bank of Baroda, Indian Bank, Punjab National Bank and Bank of India have also waived such rules entirely, citing customer convenience and financial inclusion.