Reserve Bank of India Governor Sanjay Malhotra said that the minimum balance requirements for savings accounts do not fall under the regulatory domain of the RBI, which banks decide as per their own business needs.
The RBI Governor’s remarks came in response to a question about ICICI raising the minimum balance (MAB) requirement in a savings account, two days after the bank increased the MAB requirements from Rs 10,000 to Rs 50,000. The new rules will be effective from August 1, 2025.
For Customers In Metro And Urban Areas, MAB Requirements Will Be Rs 50,000
The statement released by the ICICI stated, “For customers in metro and urban areas, the minimum average balance has been raised to Rs 50,000, up from the earlier Rs 10,000. In semi-urban branches, the new requirement is Rs 25,000, compared to Rs 5,000 previously. For rural branches, the minimum balance has increased to Rs 10,000 from Rs 2,500.”
“The RBI has left it to the banks to decide on the minimum balance. Every bank has its minimum balance requirement. This is not under any regulatory domain,” Malhotra said on the sidelines of an event.
The ICICI move has come at a time when public sector banks were scrapping the MAB requirement.
Malhotra noted that since the matter is not regulated by the RBI, each bank is free to set its policy on minimum balance amounts based on its operational model and customer segments.
One Who Fails To Maintain MAB Will Be Charged 6 Per Cent Of The Shortfall Or Rs 500
The clarification comes as several customers have been expressing concerns over rising charges and balance requirements in savings accounts
According to the bank, customers who fail to maintain the required minimum monthly average balance (MAB) will be charged 6 per cent of the shortfall or Rs 500, whichever is lower.
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