ICICI Bank on Wednesday reversed a steep increase across its minimum balance requirements for savings account holders. The development followed backlash over certain revisions in the private sector lender’s minimum balance rules, requiring customers holding accounts in metro and urban branches to maintain monthly averages of Rs 50,000 though with certain conditions. 

Now, with effect from August 1, new ICICI Bank savings accounts will attract a minimum balance requirement of Rs 15,000 in its branches in metro and urban locations, Rs 7,500 in those located in semi urban areas, and Rs 2,500 for those located in rural parts of the country, according to a communication. 

This week, the bank had raised these requirements to Rs 50,000, Rs 25,000 and Rs 10,000 respectively. 

The bank had attracted backlash from its customers for raising the minimum balance rules, with users criticising the lender’s policy over social media. 

The revised rules will also take effect from August 1. 

What are the minimum average balance (MAB) rules? 

According to the ICICI Bank portal, the customers operating savings accounts in the lender’s branches in metro or urban locations will now be required to maintain a minimum of Rs 15,000 in their accounts to avoid any penalty. 

Similarly, the limits for those holding accounts in semi-urban and rural branches of the bank also stand revised to Rs 7,500 and Rs 2,500 respectively. 

What happens to account holders failing to meet the mark? 

According to the bank, non-compliance with the minimum balance rules will attract a penalty of 6.0 per cent of the shortfall between the actual balance and the required average or Rs 500, whichever is lower. 

RBI’s take on commercial banks’ minimum balance rules 

In an interaction with reporters this week, RBI Governor Sanjay Malhotra said that commercial banks were free to decide the minimum balance for their savings account holders.

He also clarified that this aspect of savings account does not fall under the regulatory framework. 

Do all ICICI Bank customers have to bear the new minimum balance requirements?

Meanwhile, the following accounts continue to be exempt from the requirement, according to ICICI Bank:

• Salary accounts 
• Pensioner accounts 
• Student savings accounts (students of select institutions)
• PMJDY accounts and other special accounts 
• Customers maintaining Rs 2 lakh across savings and fixed deposits