ICICI Bank's Significant Policy Shift

MUMBAI: In a move that has sparked widespread discussion, ICICI Bank has announced a five-fold increase in the average minimum balance requirement for new savings accounts, raising it from Rs 10,000 to Rs 50,000 for accounts opened after August 1. This decision comes at a time when many public sector banks are eliminating minimum balance requirements altogether.

Understanding the New Requirements

The bank has set different minimum balance requirements based on location: Rs 25,000 for semi-urban areas and Rs 10,000 for rural locations. This marks the first increase in over a decade, a period during which per capita income has more than doubled.

Penalties and Criticisms

Failure to maintain the minimum balance will result in a penalty of Rs 500 or 6% of the shortfall. The bank's decision has been met with criticism, with many questioning its timing and intent, especially given the bank's recent focus on digital expansion and product innovation under CEO Sandeep Bakhshi.

Exemptions and Strategic Goals

It's important to note that statutory accounts like basic savings and salary accounts will not be subject to the new minimum balance requirement. Sources indicate that the move is aimed at boosting the share of current and savings account balances while alleviating operating cost pressures.