ICICI Bank raises minimum balance to Rs 50,000; penalties for non-compliance
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Mumbai: ICICI Bank, the country’s second-largest private lender, has significantly increased the minimum monthly average balance (MAB) requirements for savings accounts across metro, urban, semi-urban, and rural branches, effective August 2025.
For accounts opened in metro and urban areas, the MAB has risen sharply from Rs 10,000 to Rs 50,000. Semi-urban branches will now require Rs 25,000 as the minimum balance, up from Rs 5,000 previously. In rural branches, the new MAB has been raised to Rs 10,000 from Rs 2,500.
The minimum monthly average balance is the least amount customers must maintain in their accounts to avoid penalties. ICICI Bank has stated that if customers fail to meet the required MAB, a penalty of 6 percent of the shortfall or Rs 500, whichever is lower, will be imposed.
ICICI Bank is the first major private bank to implement such a steep hike in MAB requirements.
Meanwhile, data shared by the Finance Ministry in Parliament revealed that public sector banks (PSBs) collected nearly Rs 9,000 crore in penalties over five years due to customers not maintaining the minimum average monthly balance. According to Minister of State for Finance Pankaj Chaudhary, state-owned banks amassed Rs 8,932.98 crore in penalty charges from 2020-21 through 2024-25.
This announcement comes shortly after several PSBs, including Union Bank of India, Canara Bank, Bank of Baroda, Punjab National Bank, Indian Bank, Bank of India, and Central Bank of India, waived off penalties related to minimum balance maintenance. The State Bank of India, the country’s largest lender, has not charged such penalties since March 2020.
In addition to the MAB hike, ICICI Bank has introduced new rules for cash transactions. Customers are allowed three complimentary cash transactions per month, with a cumulative value limit of Rs 1 lakh. Beyond this, a fee of Rs 150 per transaction will be charged. If the transaction value exceeds the limit, a charge of Rs 3.5 per Rs 1,000 or Rs 150, whichever is higher, will apply. The higher of the two fees, based on the number or value limit, will be levied if both limits are exceeded in the same transaction.
Furthermore, the third-party cash deposit limit is capped at Rs 25,000 per transaction across all savings accounts. ICICI Bank will also impose charges on cheque returns: Rs 200 per instance for outward cheque returns (cheques deposited by customers) and Rs 500 per instance for inward cheque returns (cheques issued by customers), citing financial reasons.
