Reserve Bank of India Governor Sanjay Malhotra on Monday said setting up a minimum balance in the savings accounts is not in the regulatory domain, and the RBI has left it to the banks to decide.
“Banks can decide and choose the amount they want to fix as a minimum balance. Some banks have fixed it at Rs 10,000, some at Rs 2,000 while others have waived it off. This is not in the regulatory domain,” Governor Malhotra said.
Governor’s statement came amid the minimum average balance requirement controversy for savings accounts as the ICICI Bank last week announced a sharp rise. From August 1, 2025, customers opening new accounts will need to maintain much higher balances, making it the steepest benchmark among domestic banks.
According to the bank’s announcement, in metro and urban branches, the minimum average balance will jump from Rs 10,000 to Rs 50,000. For semi-urban areas, it will increase from Rs 5,000 to Rs 25,000.
Rural customers will now need to keep Rs 10,000, up from the current Rs 2,500. The bank has said these rules will apply only to accounts opened after the change takes effect.
A civil society organisation advocating banking stakeholders’ interests has written to the Finance Ministry, requesting its intervention into ICICI Bank’s decision to raise the minimum average balance (MAB) requirement for new savings accounts, and said such a move is detrimental to the government’s vision of inclusive banking and growth.
In a letter to the finance secretary, ‘Bank Bachao Desh Bachao Manch’ termed the private lender’s decision as “unjust and regressive”.
Notably, several public sector banks have done away with the requirement, and customers who fail to maintain the minimum prescribed balance do not need to pay a penalty.
Union Bank of India has waived off charges in general savings accounts effective from the September quarter. Bank of Baroda has waived charges on non-maintenance of minimum balance in all standard savings accounts, with effect from July 1, 2025.
While the largest public sector lender, State Bank of India (SBI) has waived off the requirement for maintaining a minimum balance in all savings accounts since 2020.