Banks Free to Set Minimum Balance, says RBI Governor in Gujarat amid ICICI MAB Hike
August 11, 2025
Mehsana: Days after ICICI Bank hiked the minimum monthly average balance (MAB) for new savings account holders to ₹50,000, Reserve Bank of India Governor Sanjay Malhotra clarified that such decisions fall outside the RBI’s regulatory purview during his first visit to Gujarat as the chief of the apex bank.
“The Reserve Bank of India has left it to the banks to decide the minimum balance amount. Some banks have a minimum balance of ₹10,000, while some have a minimum balance of ₹2,000. This does not come under the regulatory domain,” Malhotra told reporters this afternoon. He was speaking at Gozaria village in Mehsana district while attending an event organised by the State Level Bankers’ Committee (SLBC) of Gujarat.
The ICICI decision comes at a time when several public sector banks have been removing MAB requirements. Effective August 2025, ICICI Bank, the country’s second-largest private lender, has increased the minimum balance from ₹10,000 to ₹50,000 for accounts in metro and urban branches, and from ₹5,000 to ₹25,000 in semi-urban branches. In rural branches, the threshold has been raised from ₹2,500 to ₹10,000.
The bank has stated that customers failing to meet the requirement will face a penalty of 6% of the shortfall or ₹500, whichever is lower. ICICI is the first bank to implement such a steep hike in MAB.
By contrast, the State Bank of India has not imposed non-maintenance penalties since March 2020. DeshGujarat
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