In a move that will impact millions of customers, ICICI Bank has sharply increased its Minimum Average Balance (MAB) requirements for savings accounts, effective August 1, 2025. The hike applies across metro, urban, semi-urban, and rural branches — making ICICI’s MAB the highest among all domestic banks in India.
What’s Changing?
For customers in metro and urban branches, the MAB requirement has jumped five-fold from ₹10,000 to a steep ₹50,000. Semi-urban account holders must now maintain ₹25,000, up from ₹5,000, while rural customers need an average of ₹10,000, compared to the earlier ₹2,500.
The revised thresholds are far above the industry average. For perspective, HDFC Bank requires ₹10,000 in metros, ₹5,000 in semi-urban areas, and ₹2,500 in rural locations. Public sector giant SBI scrapped its minimum balance rule altogether in 2020.
Comparison with Other Banks
Most domestic banks keep their MAB limits between ₹2,000 and ₹12,000, making ICICI’s ₹50,000 requirement a new record in the private banking sector. For instance:
- Axis Bank: ₹12,000 in metros
- Bank of Baroda: ₹2,000 in metros
- Union Bank of India: ₹1,000 in metros (with cheque book)
- Kotak Mahindra Bank: ₹2,500–₹50,000 depending on account type
Penalties for Non-Compliance
Customers failing to maintain the revised MAB will face penalties as per ICICI Bank’s updated fee schedule. The bank has urged account holders to check their balances and plan ahead to avoid extra charges.
Interest Rate Cuts Add to the Impact
This hike comes on the heels of an interest rate cut announced in April 2025. ICICI reduced its savings account interest by 0.25%, bringing rates down to 2.75% for balances up to ₹50 lakh and 3.25% for higher amounts. This move mirrored similar cuts by HDFC and Axis Bank, following the Reserve Bank of India’s consecutive repo rate reductions.
Why the Change?
Banks impose MAB requirements to cover operational costs and maintain profitability. Industry experts believe this steep hike could encourage customers to opt for premium accounts or shift to banks with lower balance rules, especially as deposit rates remain subdued.
With the new rules in force from August, ICICI customers — particularly in metros — will have to rethink how they manage their savings accounts to avoid heavy penalties.
