ICICI Bank Reduces Minimum Balance Requirement After Public Outrage

ICICI Bank, India’s second-largest private lender, has revised its minimum average balance (MAB) requirement for new savings account holders after facing widespread criticism. The bank had recently raised the MAB from ₹10,000 to ₹50,000 for new customers in urban areas, but public backlash forced a rollback. As of now, the new MAB for urban customers has been reduced to ₹15,000.

Details of the Revised Policy

The initial hike to ₹50,000 was announced just days earlier, drawing negative reactions from customers and financial experts alike. Critics argued that the increase was excessive, especially when compared to other banks that have either lowered MAB thresholds or eliminated them altogether.

Responding to the criticism, ICICI Bank issued a revised policy,

• Urban areas: MAB revised to ₹15,000 (from ₹50,000)
• Semi-urban areas: MAB reduced to ₹7,500 (from ₹25,000)
• Rural and semi-urban old customers: MAB remains at ₹5,000
• While the new urban MAB is still ₹5,000 higher than the original ₹10,000, it marks a significant rollback from the steep ₹50,000 threshold.

Comparison with Other Banks

ICICI Bank’s earlier hike had stood out, particularly when most Indian banks maintain MAB levels between ₹2,000 and ₹10,000. For example, State Bank of India (SBI)—India’s largest lender—removed its minimum balance rule in 2020, setting a customer-friendly precedent.

Banks like HDFC, Axis, and Kotak Mahindra have generally opted for more moderate MAB requirements, making ICICI’s ₹50,000 move appear disproportionate. This likely added to the intensity of the backlash and led to the subsequent policy correction.

Public Reaction and Policy Implications

The rapid revision shows the power of customer response in influencing banking policies in a competitive market. Financial inclusion advocates had warned that such a high MAB would discourage low-income individuals and new account holders from engaging with formal banking.

By reducing the MAB, ICICI Bank aims to restore public trust, while still maintaining a higher-than-average threshold. The move also raises questions about banking transparency, regulatory oversight, and the need for balance between profitability and inclusivity.