In a swift response to widespread customer backlash, ICICI Bank has significantly lowered its minimum monthly average balance requirements for new savings accounts, effective immediately for those opened on or after August 1, 2025. The private lender, facing criticism for what many saw as an exclusionary policy, has adjusted the thresholds to better align with public expectations, marking a rare reversal in the banking sector.
The Reversal: From Steep Hike to Measured Adjustment
Initially, ICICI Bank had announced a sharp increase in minimum balance norms last week, requiring new metro and urban customers to maintain ₹50,000 monthly—up from ₹10,000—while semi-urban and rural accounts faced jumps to ₹25,000 and ₹10,000, respectively. The move drew immediate ire, with social media users labeling it a “blow to the middle class” and questioning its feasibility in a country where many earn less than ₹25,000 per month.
Following the outcry, the bank revised its stance on August 13, setting the new metro and urban limit at ₹15,000, semi-urban at ₹7,500, and rural at ₹2,500. Existing accounts opened before August 1 remain unaffected, retaining prior requirements. Penalties for non-compliance stay at 6% of the shortfall or ₹500, whichever is lower, but exemptions continue for salary accounts, senior citizens, pensioners under 60, students from 1,200 select institutions, and basic savings schemes.
A bank statement explained the change as a direct result of “valuable customer feedback,” emphasizing a commitment to preferences and accessibility. This adjustment positions ICICI’s urban threshold closer to competitors like HDFC Bank and Axis Bank, which require ₹10,000, while public lenders such as SBI have eliminated minimums entirely.
Customer Outrage and Market Context
The original hike sparked intense debate online. A YouTube video from a financial news channel captured public sentiment, with viewers decrying it as “discriminatory” and harmful to financial inclusion. One commenter noted, “This burdens the average earner who juggles EMIs and bills,” echoing broader concerns about affordability amid rising living costs.
Banking analysts suggest the initial policy aimed to attract higher-value clients and boost low-cost deposits, but the backlash highlighted risks to customer loyalty. In a Hindustan Times report, experts pointed out that private banks often target premium segments, yet public outcry forced a rethink, underscoring the power of social media in shaping corporate decisions.
Comparatively, peers like Kotak Mahindra and IndusInd maintain ₹10,000 urban minimums, while state-owned banks have waived such rules to promote inclusion. This reversal could help ICICI retain mid-tier customers, especially in semi-urban and rural areas where the reduced ₹2,500 rural limit aligns more closely with local incomes.
Expert Opinions: Inclusion vs. Profitability
Financial experts applaud the adjustment but caution on its implications. A policy researcher in a Business Standard analysis described it as a “customer-centric pivot,” noting that high minimums deter low-income groups from formal banking, potentially widening inequality. “Banks must balance profitability with accessibility to support India’s financial inclusion goals,” the expert added.
On YouTube, a banking tutorial channel discussed the change, with an analyst predicting it could stabilize ICICI’s deposit base amid competitive pressures from digital lenders. Another video from a fintech reviewer highlighted potential savings for users: “At ₹15,000, urban customers avoid penalties that could add up to ₹500 monthly, making it more viable for salaried individuals”.youtube
Critics, however, argue the bank should eliminate minimums like SBI to truly democratize services. A Deccan Herald report quoted an economist saying, “This partial rollback shows responsiveness, but full waivers would better serve rural economies where balances fluctuate seasonally”.
Analyzing the Impact: Benefits and Challenges
For customers, the cuts mean lower barriers to entry and reduced penalty risks, potentially encouraging more account openings in underserved areas. Rural users, now at ₹2,500, face a more realistic threshold, aligning with average incomes and promoting savings habits. Urban dwellers benefit from a 70% reduction from the proposed ₹50,000, easing pressures on middle-income households.
From the bank’s perspective, this balances deposit growth with risk management. Analysts in an NDTV Profit report estimate it could prevent a dip in new accounts, crucial as ICICI’s CASA ratio influences lending costs. However, persistent penalties might still alienate price-sensitive segments, pushing them toward zero-balance options from public banks.
Broader economic implications include enhanced financial inclusion, as lower minimums could draw unbanked populations into the formal system. Yet, experts warn that without addressing high service fees, true accessibility remains limited.
In essence, ICICI’s policy shift reflects a customer-driven recalibration, but sustained efforts toward affordability will determine its long-term success in a competitive landscape.
