Following ICICI Bank's fivefold jump in minimum average monthly balance (MAB) for metro and urban savings account holders to Rs 50,000, Jay Kotak, son of Uday Kotak, slammed the move on Saturday, highlighting the plight of several middle-class employees, who still earn Rs 25,000 per month.
Kotak also favored the digital banking and the rising fintech infrastructure In India over traditional banks for handling savings accounts. Fintechs and digital banking systems have proved to be customer-friendly and cater to a larger majority of low and middle income classes in the country.
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Jay Kotak slams ICICI Bank's MAB hike to Rs 50,000
"Every Indian must access our financial sector. 90% of India makes less than Rs 25,000 a month. A Rs 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!" Jay Kotak tweeted on social media platform 'X' (formerly Twitter).
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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 ~94% of Indians monthly income is to be left with the bank at all times, else a fee!
August 9, 2025
Implication: physical cost to serve may be high.… pic.twitter.com/x2lzrzgBD7According to Kotak, the middle-class comprises of those whose monthly income is less than Rs 25,000. "If your monthly income is more than Rs 25,000, you're earning more than 90% of India," said Jay Kotak.
Once the move is implemented, then a Rs 50,000 MAB implies a sum equal to nearly 94% of Indians' monthly income 'being left with the bank at all times'. Kotak noted that for banks, the physical cost to serve is high, which is why digital-first banking is the future for India's financial and service systems.
ICICI Bank's MAB hike
Earlier today, ICICI Bank sharply raised its minimum average monthly balance requirement for metro and urban savings account holders to Rs 50,000 for new accounts effective Aug. 1. This marks a jump from the earlier Rs 10,000 threshold, making ICICI Bank's minimum average balance, the steepest among major Indian banks.
Customers who do not maintain the minimum average balance will be levied a penalty. This is set at 6% of the shortfall or Rs 500, whichever is lower. Other leading private sector peers in India such as HDFC Bank and Axis Bank continue to maintain a relatively lower minimum average balance of Rs 10,000 for customers in metro or urban areas. Several state-owned lenders are available with zero minimum balance requirements.
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