From August 1, 2025, ICICI Bank abruptly raised its MAB requirements—what prompted the change, who it impacts, and what it means for financial inclusion.
1. Introduction
India’s second-largest private lender, ICICI Bank, has implemented a major overhaul to its savings account terms. Starting August 1, 2025, the bank elevated minimum average monthly balance (MAB) requirements drastically for brand-new savings account holders.
For metro and urban branches, the MAB soared to ₹50,000 from the previous ₹10,000—a staggering 400% increase. Semi-urban areas saw requirements jump from ₹5,000 to ₹25,000, while rural branches doubled theirs to ₹10,000.
Only new accounts opened on or after August 1, 2025, are subject to this change. Existing savings accounts remain under the old structure.
2. What Has Changed?
2.1 Revised Monthly Average Balance (MAB) Structure
| Location | Old MAB | New MAB |
|---|---|---|
| Metro/Urban | ₹10,000 | ₹50,000 |
| Semi-Urban | ₹5,000 | ₹25,000 |
| Rural | ₹2,500 / ₹5,000* | ₹10,000 |
*Note: Certain branches earlier had ₹2,500 MAB for rural areas; others had ₹5,000.
2.2 Penalties for Non-Compliance
Customers failing to maintain the required MAB will be charged: 6% of the shortfall or ₹500, whichever is lower.
2.3 Revised Service Charges & Transaction Limits
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Cash Transactions: Three free cash deposits or withdrawals per month; beyond that, ₹150 per transaction.
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Value Threshold: The first ₹1 lakh per month is free; beyond that, a charge of ₹3.50 per ₹1,000 or ₹150—whichever is higher—applies.
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Third-Party Limits: Cash deposits or withdrawals by third parties capped at ₹25,000 per transaction.
2.4 Impact on Salary Accounts and BSBDAs
The hike does not affect salary accounts, which operate under different terms. Similarly, Basic Savings Bank Deposit Accounts (BSBDAs)—including those under the Pradhan Mantri Jan Dhan Yojana—remain exempt from MAB requirements as per RBI guidelines.
3. Why Did ICICI Bank Make This Move?
3.1 Premiumisation Strategy
Industry analysts see the hike as a deliberate shift to target affluent customers—those likely to opt for additional financial products like insurance, investment portfolios, and wealth management services. The move aligns with ICICI’s push for higher-value relationships.
3.2 Operational Realities and Competitive Landscape
With rising operational costs and a competitive market, banks may require higher balances to maintain profitability. Interestingly, some public sector banks have completely eliminated MAB requirements, making ICICI’s move a bold contrast.
4. Customer Reactions: Outcry and Concerns
The decision has triggered widespread criticism online, with users calling the move “elitist” and questioning the bank’s motives.
Some feel this is “denying banking services to the poor and marginalised” and could create an exclusive environment catering only to wealthier customers. Others point out that while the bank earns higher float income from these deposits, customers get limited benefits in return.
5. Long-Term Implications
5.1 Financial Inclusion Challenges
By imposing steep balance thresholds, ICICI may alienate customers with modest means, potentially undermining broader efforts for inclusive banking.
5.2 Industry Ripple Effects
Competitors may either follow suit with similar requirements or promote their lower MAB policies to attract customers who are unwilling or unable to meet ICICI’s new limits.
5.3 Strategic Segmentation
ICICI’s sharpened focus on high-net-worth clientele could influence its product design, branch service models, and even marketing strategies over the long term.
6. What Should Customers Do Now?
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Existing Account Holders: No immediate changes—but remain vigilant for future revisions.
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New Applicants: Evaluate alternate banks if ₹50,000 MAB in urban centers isn’t feasible.
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Prefer Inclusivity: Consider BSBDAs or Jan Dhan accounts, which have no MAB requirements but come with certain transaction limits.
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Stay Updated: Keep track of any RBI announcements or possible reversals in policy due to public backlash.
7. Conclusion
The increase in MAB for new ICICI Bank savings accounts—from ₹10,000 to ₹50,000 in metros—marks a significant strategic shift. While the bank may boost profitability and deepen premium customer relationships, the move raises serious questions about inclusivity and accessibility.
As India’s banking sector continues to evolve, customers will need to weigh convenience, cost, and service benefits before choosing where to keep their savings. This change from ICICI could reshape competitive dynamics in the private banking space and influence how other lenders position themselves in the years ahead.
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