Minimum Balance Requirements Not In RBI's Regulatory Domain, Says Governor After ICICI Bank's Hike
The comments come after ICICI Bank announced a hike in minimum balance requirement to Rs 50,000.
The minimum balance requirements for bank accounts are decided by the lenders and are not in the regulatory domain of the Reserve Bank of India, Governor Sanjay Malhotra said on Monday.
"The RBI has left it to banks to decide on the minimum balance requirements. Some banks have kept it at Rs 10,000, some at Rs 2,000, some have no requirement. It is not in the regulatory domain," Malhotra told reporters.
He was asked to comment after ICICI Bank raised the monthly minimum average balance requirement across customer cohorts last week.
Metro and urban customers, who opened their savings accounts on Aug. 1 or later, will need to maintain Rs 50,000 monthly average balance. This was earlier Rs 10,000, which will continue to remain the minimum average balance for older customers.
Shares of ICICI Bank fell over 1% on Monday.
The move has 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.
