RBI Gov Reacts On ICICI Bank’s Minimum Balance Hike, Says Banks Free To Decide
"The Reserve Bank of India has left it to the banks to decide the quantum of minimum average balance," Malhotra told reporters during his visit to Gozaria village in Mehsana district of Gujarat. The RBI Governor had graced an event organised by the State Level Bankers” Committee (SLBC) of Gujarat.
Mumbai: Amid the controversy surrounding ICICI Bank raising its Minimum Balance requirement steeply, the Reserve Bank of India (RBI) Governor Sanjay Malhotra on Monday clarified that the minimum balance of a bank does not come under the regulatory domain of the central bank. He said the decision of minimum balance is up to the banks.
"The Reserve Bank of India has left it to the banks to decide the quantum of minimum average balance," Malhotra told reporters during his visit to Gozaria village in Mehsana district of Gujarat. The RBI Governor had graced an event organised by the State Level Bankers” Committee (SLBC) of Gujarat.
"Some banks have capped it at Rs 10,000, others at Rs 2,000, and some have done away with it altogether. This issue does not fall under the regulatory domain," he added.
Recently, the private lender has raised the minimum monthly average balance (MAB) requirement for new savings accounts opened (in metro and urban areas) on or after August 1 by five times to Rs 50,000. The MAB for savings bank accounts till July 31, 2025 was Rs 10,000. Similarly, MAB for semi-urban locations and rural locations have been increased five times to Rs 25,000 and Rs 10,000, respectively. Customers who fail to maintain the MAB requirements will be charged a penalty of 6 per cent of the shortfall in the required balance or Rs 500.
The decision has drawn flak from civil society members and customers who argued that it would make banking less accessible for low-income customers.
Civil society organisation 'Bank Bachao Desh Bachao Manch' has written to the Finance Ministry urging it to intervene and reverse the decision. "This retrograde decision undermines the principle of inclusive banking,” said joint conveners of the organisation Biswaranjan Ray and Soumya Datta.
On the other hand, several public sector banks have removed minimum balance requirements altogether to promote inclusivity. State Bank of India, Punjab National Bank, Canara Bank do not currently charge penalties for not maintaining a minimum balance
