ICICI Bank, India’s second-largest private lender, has sharply increased the monthly minimum average balance requirement for new savings account holders, making one of the steepest hikes by a major bank in recent years. The new rules, effective August 1, apply across all customer segments and locations, according to an update on the bank’s official website. Customers in metro and urban areas who open savings accounts on or after August 1 will now be required to maintain a monthly average balance of ₹50,000 to avoid penalties, a sharp rise from the ₹10,000 requirement for older customers in the same locations. The minimum average balance for existing account holders in metro and urban branches remains unchanged at ₹10,000.
For semi-urban locations, the bank has set the monthly average balance for new customers at ₹25,000, while in rural areas the figure is ₹10,000. Older customers in rural and semi-urban areas will continue to have a lower requirement of ₹5,000 per month. Customers who fail to maintain the prescribed minimum average balance will face a penalty of six per cent of the shortfall or ₹500, whichever is lower. The bank has also specified transaction limits. Savings account holders will be allowed three complimentary cash deposits per month, after which each additional deposit will incur a fee of ₹150. The cumulative value of free cash deposits is capped at ₹1 lakh per month. Similarly, cash withdrawals from savings accounts will be free only for the first three transactions per month.
The cap on third-party cash deposits remains at ₹25,000 per transaction for all savings account holders. The latest changes come just months after ICICI Bank reduced the interest rate on its savings accounts in April 2025 by 0.25 percentage points. Deposits of up to ₹50 lakh now earn an interest rate of 2.75 per cent per annum.
The decision to raise minimum balance requirements runs counter to moves by other major Indian banks in recent years. The State Bank of India, the country’s largest lender, scrapped its minimum balance rule in 2020. Most other banks maintain lower thresholds, generally ranging between ₹2,000 and ₹10,000 depending on the account type and location. Banking analysts say ICICI Bank’s move could affect customer acquisition among lower-income segments while boosting balances among urban and metro customers.
While ICICI Bank has not issued an official explanation for the increase, industry watchers suggest it may be part of a broader strategy to optimise deposit costs and improve operational efficiency in a competitive interest rate environment. Despite the changes, domestic banking liquidity remains relatively comfortable, and several lenders have moved in the opposite direction, rationalising or reducing penalties for not maintaining minimum balances. ICICI Bank’s move positions it among a small group of lenders pushing for higher deposit thresholds, setting a significantly higher bar for new customers than the prevailing norms in the Indian banking sector.
