Minimum balance requirement for bank accounts not under regulatory domain: RBI Governor
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New Delhi: Reserve Bank Governor Sanjay Malhotra on Monday said that minimum monthly average balance (MAB) requirement in customer accounts is ‘not under regulatory domain’.
Malhotra’s response comes two days after ICICI Bank made a whopping hike in MAB requirement to Rs 50,000.
‘The RBI has left it to the banks to decide on the minimum balance. Every bank has its own minimum balance requirement. This is not under any regulatory domain,’ Malhotra was quoted as saying.
The statement suggests that banks are free to fix any amount of their choice as the minimum monthly average balance in accounts.
CICI Bank, the country’s second-largest private lender, spiked the MAB requirement even as public sector banks were scrapping the MAB requirement, according to The Indian Express.
The bank put the monthly average balance from Rs 10,000 to Rs 50,000 starting August 2025 for all accounts opened in metro and urban areas.
As for semi-urban areas, it is put at Rs 25,000 from the previous Rs 5,000, and in rural branches customers require to have the balance of Rs 10,000, compared to the earlier Rs 2,500, according to the report.
In the event of customers failing to maintain the minimum balance criteria, there will be a ‘penalty of 6 per cent of the shortfall in required MAB or Rs 500 whichever is lower’.
However, the country’s largest lender State Bank of India has not imposed non-maintenance penalties since March 2020.
