Mumbai –ICICI Bank is one of India’s largest private banks. They have announced a substantial increase in their savings account minimum average balance requirement. Customers will be required to keep a higher average balance on their accounts starting August 1, 2020. Customers in metros, urban areas, semi-urban and rural regions are expected to be affected by this move.
Customers in urban and metro areas will be required to keep a minimum balance of Rs50,000. This is an increase over the previous Rs 10,000. For semi-urban locations, this requirement was also raised, from Rs5,000 up to Rs25,000. In rural areas, the required minimum balance increased from Rs 2,500 to Rs 10,000. The changes will affect many customers. Those with lower incomes in semi-urban and rural areas may be affected by the sudden increase.
According to a press release from ICICI Bank, customers who fail to maintain the minimum required balance will be charged a penalty of 6% or Rs 500, whichever amount is less. If a customer does not meet the minimum balance requirement, for example, by Rs5,000, then they may be charged Rs300. These changes will likely prompt customers to reconsider banking options. They may even consider alternatives such as basic savings accounts, which do not have high thresholds for balances.
The bank spokesperson explained that, while penalties for non-compliance might seem high at first glance, the charges will be waived in certain circumstances. Customers enrolled in Family Banking can meet this requirement collectively. In this program, a family must have a combined balance that is 1.5 times higher than the criteria for eligibility. Non-maintenance fees will only be applied to individuals who do not meet the required MAB if there is a balance shortfall. These charges are not applicable to pensioners.
ICICI Bank also clarified its charges for all other financial transactions, with the new rules. A fee of Rs 500 per return will be charged for recurring ECS and NACH debits due to a lack of funds or any other reason. This charge is capped at 3 charges per month. Outward checks (cheques that the customer has deposited) are charged Rs200 for each instance, whereas an inward check (that the customer issued) is charged Rs500 for every instance, and Rs50 for any other reason.
This adjustment to the minimum requirement for balances demonstrates that the bank wants its customers to be more engaged and generate revenue. It also brings up concerns over the possible financial burden that this change could impose, particularly on India’s semi-urban and rural communities.
Analysts suggest that customers may reevaluate their relationship with ICICI Bank if such actions are taken. Others may opt to switch banks that have more flexible minimum balance requirements.
