ICICI Bank unleashes new minimum balance rule, faces backlash

ICICI Bank, one of India’s fastest-growing private lenders, is pivoting towards wealthier customers by sharply increasing the minimum balance requirement for new savings accounts in metropolitan and urban branches.

From 1 August, anyone opening a new account will need to maintain an average monthly balance of Rs 50,000 — a fivefold jump from the previous Rs 10,000. This is now the steepest minimum balance threshold among domestic banks, far above the industry norm of Rs 2,000 to Rs 10,000.

The move sets ICICI apart from the State Bank of India, the country’s largest lender, which abolished its minimum balance rule entirely in 2020. Even HDFC Bank, now India’s biggest private sector lender by assets after merging with HDFC Ltd, requires only Rs 10,000 in metro branches, Rs 5,000 in semi-urban areas, and Rs 2,500 in rural locations.

While the bank says minimum balance requirements help offset operational costs, the sharp increase has sparked a wave of online criticism. One widely shared post contrasted SBI’s Rs 0 requirement with ICICI’s new Rs 50,000 threshold, asking, “One calls it financial inclusion, the other calls it profit. Which side is your bank really on?”

Another user questioned whether this was “a blatant display of arrogance,” while others pointed out that ICICI could “collect Rs 50k, pay 2 per cent and lend it out at 11per cent  — wow, profit!” Some also argued that if the move applied mainly to premium accounts, the bank should have communicated this more clearly.

Consumer rights advocates argue the policy risks pricing out ordinary customers at a time when financial inclusion remains a national priority.

Under the updated fee schedule, customers who fail to maintain the new balance will face penalties. ICICI has urged new account holders to monitor their balances closely to avoid charges.

The change comes on the heels of an April interest rate cut, when ICICI lowered savings account returns by 0.25 percentage points – in line with similar moves by HDFC Bank and Axis Bank. From 16 August, balances up to Rs 50 lakh will earn 2.75 per cent interest, while those above Rs 50 lakh will get 3.25 per cent, both down by 0.25 percentage points.

With higher balance requirements and reduced interest rates, ICICI appears to be doubling down on higher-value customers – but the backlash suggests many feel the bank is turning its back on the everyday depositor.