In a country where poverty remains a visible reality, banks requiring customers to keep large minimum balances in their accounts can seem out of touch. Recently, ICICI Bank announced a major change to its savings account rules, increasing the required balance significantly. The decision has sparked debate, frustration, and questions about fairness.
ICICI’s New Rule – What Changed?
From August 1, 2025, any new account opening with ICICI Bank will come under the revised minimum balance requirement, which has gone up sharply. Customers in metropolitan cities must now maintain at least ₹50,000 in their accounts, compared to the earlier ₹10,000. In smaller cities, the limit is ₹25,000, while rural branches still require ₹10,000.
The bank has not provided a detailed reason for the hike, though rising operational costs are a likely factor. For lower-income account holders, however, meeting this new target will be difficult, and that is where most of the criticism comes from.
Why Do Banks Enforce Minimum Balances?
Banks say the funds they ask customers to maintain help cover the cost of essential services such as ATMs, mobile banking, customer support, branch operations, staff salaries, and digital infrastructure. While these are legitimate expenses, the question is whether such a high balance is justified, particularly when it places a heavier burden on customers with modest incomes.
Daily vs. Monthly Average Balance – The Basics
Minimum balance policies are generally applied in one of two ways:
- Daily balance: You must keep the required amount in your account every day.
- Monthly average balance: The average over the month must meet the requirement.
This may sound like a small technicality, but it has a big impact on how much flexibility customers have. Banks benefit from these rules, while customers often find them confusing and restrictive.
Penalties and Extra Charges
If your account falls short of the required balance, ICICI imposes a penalty – either 6% of the shortfall or ₹500, whichever is lower. On top of that, customers can make only three free cash deposits per month; after that, each deposit costs ₹150. Even putting money into your own account can now come with a fee.
RBI’s Position
RBI Governor Sanjay Malhotra has stated that individual banks have the right to set their own minimum balance policies, and the central bank does not intervene. Across India, requirements vary: some banks ask for as little as ₹2,000, while others have removed the rule entirely. ICICI’s new ₹50,000 limit stands out as one of the highest, raising questions about inclusivity in the banking system.
Civil society groups have urged the Finance Ministry to take action, arguing that banking should be accessible to everyone. So far, no changes have been made.
Zero-Balance Alternatives
Several public sector banks, including State Bank of India, Punjab National Bank, Indian Bank, Canara Bank, and Bank of Baroda, offer zero-balance savings accounts. In contrast, most private banks still have minimum balance requirements, with ICICI’s limit currently the highest among them.
While switching banks is an option, it is not always easy or practical. Nearly 90% of Indians earn less than ₹25,000 a month, making it unrealistic for most people to maintain ₹50,000 in their savings accounts.
For now, the debate continues. Critics say banks are prioritising profits over accessibility, while supporters insist that rising operational costs must be met. Whether these policies will change is still an open question.
