Southwala Shorts
- Indian banks are making big changes to their minimum balance rules in 2025, and the differences between private and public banks are now more visible...
- ICICI Bank shocked many new customers on August 1, 2025, when it increased the monthly average balance (MAB) requirement to ₹50,000 in metro and urban...
- Semi-urban customers were asked to maintain ₹25,000, and rural customers ₹10,000.
- Failure to maintain the balance would attract a 6% penalty on the shortfall or ₹500, whichever was lower.
Indian banks are making big changes to their minimum balance rules in 2025, and the differences between private and public banks are now more visible than ever.
ICICI Bank Sudden Hike and Quick Rollback
ICICI Bank shocked many new customers on August 1, 2025, when it increased the monthly average balance (MAB) requirement to ₹50,000 in metro and urban branches. Semi-urban customers were asked to maintain ₹25,000, and rural customers ₹10,000. Failure to maintain the balance would attract a 6% penalty on the shortfall or ₹500, whichever was lower.
The backlash was immediate. Customers criticised the move as unrealistic, especially for first-time account holders. Within two weeks, ICICI rolled back the hike – the MAB now stands at ₹15,000 for urban, ₹7,500 for semi-urban, and ₹2,500 for rural branches.
Minimum Balance Comparison : Private vs Public Banks
| Bank Name | Urban/Metro MAB | Semi-Urban MAB | Rural MAB | Waiver Options | Penalty for Shortfall |
|---|---|---|---|---|---|
| ICICI Bank | ₹15,000 | ₹7,500 | ₹2,500 | Fixed deposit or linked accounts | 6% of shortfall or ₹500 |
| HDFC Bank | ₹10,000 | ₹5,000 | ₹2,500 | FD option available | ₹300–₹600 |
| Axis Bank | ₹12,000 | ₹12,000 | ₹12,000 | FD of ₹50,000 (12 months) | ₹300–₹500 |
| Kotak Mahindra Bank | ₹10,000–₹20,000 | ₹10,000–₹20,000 | ₹10,000–₹20,000 | FD option available | 6% of shortfall or ₹500 |
| Yes Bank | ₹10,000–₹25,000 | ₹10,000–₹25,000 | ₹10,000–₹25,000 | FD option available | ₹150–₹500 |
| SBI | Nil | Nil | Nil | Not applicable | None |
| PNB | Nil | Nil | Nil | Not applicable | None |
| Canara Bank | Nil | Nil | Nil | Not applicable | None |
| Indian Bank | Nil | Nil | Nil | Not applicable | None |
| Bank of Baroda | Nil | Nil | Nil | Not applicable | None |
Public Sector Banks Remove Penalties
Public sector banks are moving in the opposite direction. SBI, PNB, Canara Bank, Indian Bank, and Bank of Baroda have removed penalties for not maintaining a minimum balance. Customers can now keep any amount in their savings account without being charged.
RBI Stand
RBI Governor Sanjay Malhotra has made it clear with the central bank does not control these rules. Each bank is free to set, increase, reduce, or remove MAB requirements.
What This Means for Customers
The change in policies shows two approaches. Private banks continue to keep higher balance requirements to target premium customers, while public sector banks are focusing on inclusivity by removing penalties. For anyone opening a new account, comparing MAB rules could help avoid unnecessary charges.
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