ICICI Bank raises minimum average balance for new savings accounts from August 2025—find out the new rules, charges, and impact on customers.
ICICI Bank shares slipped on Monday after the private sector lender announced a sharp increase in its minimum average balance (MAB) requirements, a change that will take effect from August 1, 2025, for all new savings accounts.
The move marks a significant shift in the bank’s retail strategy. In metro and urban areas, the MAB for new accounts will jump from ₹10,000 to ₹50,000. In semi-urban branches, the requirement will increase from ₹5,000 to ₹25,000, while rural branches will see it rise from ₹5,000 to ₹10,000. Existing account holders will remain on their current terms unless the bank communicates changes separately.
Customers failing to maintain the required balance will face a penalty of 6% of the shortfall or ₹500, whichever is lower. Certain groups, such as pensioners, will remain exempt. Under the bank’s Family Banking program, charges can also be waived if the combined balance across linked accounts meets 1.5 times the eligibility criteria. Salary accounts and Basic Savings Bank Deposit Accounts (BSBDA) will continue to have zero balance requirements.
Why the Hike?
According to Vishal Trehan, a SEBI-registered analyst at Aauriga Quantrade, the higher balance requirements reflect ICICI Bank’s focus on premium customers, enabling better cross-selling opportunities and strengthening low-cost deposit inflows. With savings deposit rates now as low as 2.75% for balances up to ₹50 lakh, the move also supports liquidity management and net interest margin (NIM) protection.
Trehan noted that ICICI Bank, which has a CASA ratio of around 45% and about 35 crore savings accounts, could see average balances in new urban accounts nearly double from the current ₹25,000–₹30,000 range. However, he also warned of a possible downside: the steep increase might push some middle-income customers toward public sector banks offering zero-balance accounts or private rivals with lower thresholds. Social media discussions have already reflected customer concerns about potential churn.
From a financial inclusion perspective, critics point out that ₹50,000 is close to twice the monthly income of many urban households, raising the possibility that lower-income customers may opt for fintech platforms or PSU banks instead.
Industry Contrast
Ujvin Nevatia, another SEBI-registered analyst, said the strategy underlines ICICI Bank’s intent to optimise its balance sheet and monetise high-value customers. However, he highlighted a growing divide in the industry—while private banks increasingly focus on affluent clients, several public sector banks have removed MAB penalties altogether, aiming to be more inclusive.
Updated Service Charges
Alongside the MAB hike, ICICI Bank has revised service charges for cash transactions. Customers will be allowed three free cash deposits per month at branches and cash recycler machines. Beyond that, each transaction will cost ₹150. The monthly free deposit limit is ₹1 lakh; exceeding this will attract a fee of ₹3.5 per ₹1,000 or ₹150, whichever is higher. Third-party deposits are capped at ₹25,000 per transaction.
Cash withdrawals follow a similar structure—three free transactions per month at branches, with subsequent withdrawals costing ₹150 each. The free monthly withdrawal limit is ₹1 lakh, after which the same ₹3.5 per ₹1,000 or ₹150 charge applies. Third-party withdrawals are also capped at ₹25,000 per transaction.
For non-ICICI Bank ATM transactions in six major metros—Mumbai, New Delhi, Chennai, Kolkata, Bengaluru, and Hyderabad—customers will be charged ₹23 per financial transaction and ₹8.5 per non-financial transaction after the first three combined transactions in a month.
Deposits made through cash acceptor or recycler machines during non-working hours (4:30 p.m. to 9 a.m.) or on holidays will attract a ₹50 fee if the total monthly deposit during these times exceeds ₹10,000.
Regulatory Action and Earnings Performance
In a separate development, the Reserve Bank of India (RBI) imposed a ₹75 lakh penalty on ICICI Bank for violations related to property valuation and the opening of current accounts.
Despite these regulatory and policy developments, the bank posted a strong first-quarter performance. Net profit rose 15% year-on-year to ₹12,768.21 crore, exceeding market estimates. Net interest income increased 8.4% to ₹21,634.46 crore, while asset quality improved, with the gross NPA ratio falling to 1.67% from 2.15% and the net NPA ratio edging down to 0.41% from 0.43%.
Market Reaction
On investor forums such as Stocktwits, retail sentiment toward ICICI Bank has shifted from ‘neutral’ a month ago to ‘bearish’ following the announcement, despite the stock being up over 11% year-to-date.
Looking Ahead
For ICICI Bank, the success of this strategy will depend on its ability to retain profitable customers while mitigating churn risk. The bank’s focus on affluent clients may deliver stronger deposit growth and better cross-selling returns, but the challenge will be in responding quickly if competitors attract disaffected customers with more inclusive offerings.