ICICI Bank has announced a five-fold increase in the minimum monthly average balance (MAB) requirements for its new savings bank accounts, effective August 1, 2025.

The private sector bank has updated its savings account service charges, where new savings bank accounts opened in metro and urban locations will require an MAB of ₹50,000. For semi-urban and rural locations, the MAB is ₹25,000 and ₹10,000, respectively.

MAB is the simple average of day-end balances in an account for a calendar month. Savings bank accounts at ICICI Bank earn an interest rate of 2.5 per cent per annum.

Customers who have opened accounts before August 1, 2025, are currently still subject to their old MAB levels.

Salary account holders, PM Jandhan account holders, and basic savings bank deposit account holders are exempt from this high MAB, as these are zero-balance accounts.

Notably, if account holders fail to maintain the required MAB, they will face penal charges. These charges will be 6 per cent of the shortfall in the required MAB, or ₹500, whichever amount is lower. Pensioners have been exempted from this penalty.

Also, the penalty charges are waived off for certain select customers, such as those with deposits (current+savings+term+recurring) and a balance of ₹2 lakh or deposits, balance, mutual funds and demat assets of ₹25 lakh and above.

Industry trend

This decision by ICICI Bank comes at a time when public sector banks in India have largely moved towards rationalising or completely waiving off penal charges for failing to maintain MAB. Major public sector lenders, including State Bank of India, Punjab National Bank, Canara Bank, and Indian Bank, have waived these penal charges for all savings accounts.

The new MAB charges of ICICI are significantly higher than those of its homegrown private banking peers - HDFC Bank (₹10,000 for urban regular savings account) and Kotak Mahindra Bank (₹10,000 for classic savings account)

ICICI Bank’s decision has drawn criticism over social media, with several users perplexed as to why they would keep such a high amount locked in savings accounts earning such low interest.

“I was keeping my bank account for stock market transactions, but now I am going to shut my bank account and will move to my other bank where it’s nil,” wrote a user on X.

“So basically your savings bank account just turned into a VIP lounge and you can’t afford to enter,” another user wrote.

However, some banking industry observers said that the hike gives a signal that the bank is looking to tap into a more affluent customer base with whom it can do bigger business through related services.

“Finance ministry has to look into this matter in public interest,” Soumya Datta, joint convenor of Bank Bachao Desh Bachao Manch, a civil society forum, told TheTelegraph on Saturday.