ICICI Bank Sharp Hike in Minimum Balance Requirement: Policy Shift and Customer Impact

In a major policy change, ICICI Bank, India’s second-largest private lender, has significantly raised its Minimum Average Balance (MAB) requirements across metro, urban, semi-urban, and rural branches. Effective August 2025, the hike comes with stricter penalties and revised transaction rules, making it a crucial development for millions of account holders. This move makes ICICI Bank the first among private banks to implement such a steep increase, prompting concerns and debates over the banking cost burden on common customers.

Steep Hike in MAB Across All Locations

ICICI Bank has increased the MAB drastically for different types of locations

• Metro & Urban branches: Raised from ₹10,000 to ₹50,000
• Semi-Urban branches: From ₹5,000 to ₹25,000
• Rural branches: From ₹2,500 to ₹10,000

This change applies to all new accounts opened starting August 2025. The increase represents a fivefold jump in some cases, far exceeding industry norms.

Penalties for Non-Maintenance

Failure to maintain the MAB will now attract a penalty of,

• 6% of the shortfall in the required balance

OR

• ₹500, whichever is lower

This penalty structure is stricter than those in many public sector banks, some of which have moved to waive such penalties entirely.

Comparison With Public Sector Banks (PSBs)

While ICICI Bank tightens MAB rules, many PSBs have taken the opposite approach,

• Banks like Canara Bank, PNB, Bank of Baroda, Union Bank, and SBI have either reduced or completely waived penalties for not maintaining MAB.
• The Finance Ministry informed Parliament that ₹8,932.98 crore was collected as penalties by PSBs from 2020 to 2025, leading to public pressure and eventual policy changes.

Cash Transaction Rules Revised

Along with the MAB hike, ICICI Bank has implemented new cash transaction limits,

3 free cash deposits per month

After that, ₹150 per transaction is charged

Complimentary deposit limit: ₹1 lakh/month

Above ₹1 lakh: ₹3.5 per ₹1,000 or ₹150, whichever is higher

If both number and value limits are breached, higher charge applies

Implications for Customers

The MAB hike is likely to impact low- and middle-income account holders, especially in urban areas where the ₹50,000 minimum may be unaffordable for many.

The penalty system and transaction fees could lead to higher overall banking costs.

Customers may consider switching to PSBs, which offer more relaxed rules on minimum balances and penalties.