What Are the Implications of ICICI Bank's Minimum Average Balance Increase?

Mumbai, Aug 9 (NationPress) - On Saturday, ICICI Bank announced a significant increase in the minimum average balance (MAB) requirement for its savings accounts, particularly affecting new and urban customers in metropolitan areas. Under the revised structure, customers in metro and urban branches are now required to maintain a minimum average balance of Rs 50,000, a substantial increase from the previous threshold of Rs 10,000. This change is applicable only to new customers who joined after August 1, 2025.

For semi-urban customers, the requirement is set at Rs 25,000, while rural customers must maintain a balance of Rs 10,000 to avoid incurring penalties.

If customers do not meet the new MAB requirement, they will incur non-maintenance penalties, which are calculated as 6 percent of the shortfall from the required MAB or Rs 500, whichever is lower.

The Minimum Average Balance signifies the minimum monthly average that account holders must uphold to avoid penalty fees. Banks compute MAB by adding the closing balance in an account for each day of the month and dividing this total by the number of days in that month. Therefore, consumers must strategize to ensure their daily balances total at least Rs 15 lakh.

For illustration, if your MAB requirement is Rs 50,000 for a 30-day month and you maintain Rs 50,000 in your account every day, your MAB will precisely be Rs 50,000.

Conversely, if you maintain Rs 15 lakh for just one day and a zero balance for the rest of the month, your MAB would still be: Rs 15,00,000 divided by 30 = Rs 50,000. This approach may be suitable for those prioritizing liquidity rather than keeping Rs 50,000 locked in their account for the entire month.

Imagine you are a middle-income customer receiving a regular salary of Rs 7.5 lakh on the first day of each month. By maintaining Rs 7.5 lakh in your account for two days, you would satisfy the MAB requirements, allowing you to pay your EMI or monthly rent thereafter. Thus, timing your payments is crucial while keeping MAB criteria in mind.

Consider linking a fixed deposit to your savings account via a sweep-in facility. Once you have met your MAB requirements, sweep the excess into your FD account to earn higher interest. Customers may also explore switching to a zero-balance or low-MAB account offered by some banks.

For example, the State Bank of India (SBI) abolished the minimum balance requirement in 2020. Most other banks maintain much lower thresholds, usually ranging between Rs 2,000 and Rs 10,000.

–IANS

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