Minimum Balance Rule
Revised Rules for Savings Bank Accounts, Detailed Comparison
Private sector ICICI Bank has announced significant changes to its savings account policy effective 1st-Aug-2025. The minimum balance required for new savings accounts has been increased substantially.
The minimum average monthly balance – MAMB requirement at metropolitan and urban branches has been raised to Rs 50,000 from the existing Rs 10,000.
The move has sparked debate, with many believing it could make banking services less accessible to low income people.
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Details of the New Minimum Balance Rules
The revised changes will only apply to accounts opened on or after the implementation date. These changes are based on branch location
- Metro and Urban Branches: Rs. 50,000 (earlier Rs. 10,000)
- Semi Urban Branches: Rs. 25,000 (earlier Rs. 5,000)
- Rural Branches: Rs. 10,000 (earlier Rs. 5,000)
This means that anyone opening a new account after 1st-Aug-2025 will have to maintain a much higher average balance every month, depending on the branch location.
Penalty structure for Non Compliance
ICICI Bank outlines penalties for failing to maintain required balance
- A penalty of 6% of the shortfall amount or Rs 500, whichever is lower will be imposed.
- The calculation will be made on a monthly basis.
This policy is intended to encourage account holders to maintain the prescribed balance, although it may put additional financial pressure on those with limited resources.
How other Banks handle Minimum Balance Rule
The approach taken by ICICI Bank is in contrast to many other major Indian banks, which have eased or completely removed minimum balance requirements in recent years..
(i). State Bank of India (SBI)
- In 2020 SBI removed the minimum average balance requirement for all savings accounts across metro and rural branches.
- This move was aimed at improving financial inclusion and making banking more accessible.
(ii). Punjab National Bank (PNB)
- PNB has eliminated penalty charges for not maintaining the minimum average balance.
- The change applies to all categories of savings accounts.
(iii). Canara Bank
- Canara Bank also removed the average monthly balance requirement for its savings accounts.
- The decision has been welcomed by customers in both urban and rural regions.
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Minimum Balance Rule | Possible impact on Banking access
Experts suggest that the increase in MAMB by ICICI Bank could reduce accessibility for low income groups particularly in urban areas where the jump is the highest.
In contrast public sector banks such as SBI, PNB and Canara Bank have chosen to make their savings accounts more inclusive by scrapping such requirements altogether.
As per data from the Reserve Bank of India (RBI) that schemes like the Pradhan Mantri Jan Dhan Yojana (PMJDY) have helped millions open bank accounts with zero balance.
However, stricter private bank requirements may create a gap between inclusion goals and actual accessibility.
Minimum Balance Rule | Key points to remember
- New ICICI Bank rules apply from 1st-Aug-2025 and affect only newly opened accounts.
- Metro and urban branch requirement: Rs. 50,000.
- Semi-urban branch requirement: Rs. 25,000.
- Rural branch requirement: Rs. 10,000.
- Penalty: 6% of the shortfall or Rs. 500, whichever is lower.
Updated list of the Banks with Minimum Balance requirement
| Bank | Rural Branches | Urban/Metro Branches |
| State Bank of India | Rs. 0 Balance | Rs. 0 Balance |
| Union Bank of India | With cheque book: Rs. 250 | With cheque book: Rs. 1,000 |
| Without cheque book: Rs. 100 | Without cheque book: Rs. 500 | |
| HDFC Bank | Rs. 2,500 | Rs. 10,000 |
| ICICI Bank | Rs. 10,000 | Rs. 50,000 |
| Axis Bank | Rs. 2,500 | Rs. 12,000 |
| Bank of Baroda | Rs. 500 | Rs. 2,000 |
| IDFC First Bank | Rs. 10,000 or Rs. 25,000 | Rs. 10,000 or Rs. 25,000 |
| Bank of India | Rs. 0 Balance | Rs. 0 Balance |
Private Bank or Public Bank; Right Decision to Open an Account?
The Indian banking sector is clearly divided in its approach to minimum balance requirements. Private sector institutions such as ICICI Bank are moving toward higher thresholds, while public sector banks are reducing or removing such conditions entirely.
This difference in policy could influence where new account holders choose to bank in the future. For those who want more flexibility and lower maintenance costs, banks with zero balance policies may look more attractive to them.
However, those who value the services and features of private banks may opt for accounts with higher balances despite the additional costs.
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