ICICI Bank Hikes Minimum Balance to ₹50,000: MAB Calculation & Penalty Explained
ICICI Bank, one of India’s leading private sector banks, has announced a sharp increase in its minimum average balance (MAB) requirement for new savings accounts opened from August 1, 2025. The move marks a significant change in banking norms, especially in metro and urban areas, where the MAB has escalated from ₹10,000 to ₹50,000. This increase also extends to semi-urban and rural branches, with thresholds rising to ₹25,000 and ₹10,000 respectively. The new requirement aims to target new customers, while existing accounts prior to August will retain the earlier norms. 💼
What is Minimum Average Balance (MAB)?
The Minimum Average Balance (MAB) is the average balance that an account holder must maintain over the course of a month to avoid penalty charges. It is calculated by adding the closing balance of each day in the month and dividing this sum by the number of days in that month. For example, if the MAB requirement is ₹50,000 for a 30-day month, keeping ₹50,000 every day means the requirement is met. Alternatively, maintaining a higher balance for fewer days can also suffice - holding ₹15 lakh for one day and zero balance for the remaining days equates to an MAB of ₹50,000, calculated as ₹15,00,000 divided by 30. 📊
Penalties for Not Maintaining MAB
Failure to maintain the prescribed MAB attracts penalties at ICICI Bank. The penalty is 6% of the shortfall amount or ₹500, whichever is lower. This means if an account falls below the required average balance, the penalty will be a fraction of the deficit capped at ₹500. This penalty structure applies uniformly across metro, semi-urban, and rural branches. The sharp hike in MAB for new accounts, especially in metro areas, has sparked considerable discussion among customers and financial experts alike. ⚠️
Real-Life Example
To illustrate the impact with a real-life example: Mr. Sharma, a salaried professional in Mumbai, opens a new ICICI Bank savings account in August 2025. He is required to maintain an average balance of ₹50,000 every month. Suppose in a 30-day month, he maintains ₹60,000 for the first 10 days but only ₹20,000 for the remaining 20 days. His monthly average balance would be [(₹60,000 × 10) + (₹20,000 × 20)] ÷ 30 = ₹33,333, which is below the ₹50,000 requirement. The shortfall is ₹16,667 and the penalty at 6% of this amount comes to ₹1,000, but since the penalty is capped at ₹500, he would be charged ₹500. 📝
Broader Industry Trends
The hike also reflects broader industry trends where banks aim to increase their deposits for better liquidity and reduce operational costs associated with low-balance accounts. However, this change may place additional pressure on middle-income customers who manage their monthly finances carefully. 🔄
Comparison of Old and New MAB Requirements
Below is a chart and table highlighting the comparison between the old and new MAB requirements across different areas:
Bar Chart Comparison
| Area | Old Minimum Average Balance (₹) | New Minimum Average Balance (₹) | Penalty for Non-Maintenance |
|---|---|---|---|
| Metro and Urban | 10,000 | 50,000 | 6% of shortfall or ₹500 (whichever is lower) |
| Semi-Urban | 5,000 | 25,000 | 6% of shortfall or ₹500 (whichever is lower) |
| Rural | 2,500 | 10,000 | 6% of shortfall or ₹500 (whichever is lower) |
The ICICI Bank minimum balance 2025 update applies only to savings accounts opened after August 1, 2025, with exceptions for salary and zero-balance accounts which remain exempt from the MAB requirement. 📅
SEO-Friendly FAQs
What is the new ICICI Bank minimum balance 2025 requirement for metro areas?
The new minimum average balance for metro and urban areas is ₹50,000 for savings accounts opened from August 1, 2025.
How does ICICI Bank calculate the Minimum Average Balance (MAB)?
MAB is calculated by adding the closing balance of each day in the month and dividing by the number of days in the month.
What penalties does ICICI Bank impose for not maintaining the revised minimum balance?
The penalty is 6% of the shortfall amount or ₹500, whichever is lower.
Does the ICICI Bank minimum balance hike affect existing accounts?
No, existing accounts prior to August 1, 2025, retain the earlier norms.
Are salary accounts included in ICICI Bank’s new minimum balance policy?
No, salary and zero-balance accounts are exempt from the MAB requirement.
How much is the minimum balance requirement in semi-urban areas at ICICI Bank in 2025?
The new MAB for semi-urban areas is ₹25,000.
What is the penalty cap for non-maintenance of the ICICI Bank MAB?
The penalty is capped at ₹500.
How can one avoid penalties under ICICI Bank’s new minimum balance rules?
Maintain the required average balance throughout the month or opt for exempt account types like salary accounts.
Why did ICICI Bank hike the minimum average balance to ₹50,000?
To increase deposits for better liquidity and reduce costs associated with low-balance accounts.
Is the ICICI Bank minimum balance hike applicable to rural accounts in 2025?
Yes, the new MAB for rural areas is ₹10,000.
This change by ICICI Bank, raising the minimum average balance fivefold in urban areas, is unprecedented among major Indian banks. Customers must be aware of these new norms and plan their finances accordingly to avoid penalties and maintain healthy banking relationships. The move aligns ICICI Bank’s retail banking strategy with evolving financial sector dynamics while putting a spotlight on digital-first banking services as a key to cost-efficiency and customer retention. 🌟
