ICICI Bank has substantially hiked the average minimum balance requirement for new savings accounts in metro and urban areas by five fold to Rs 50,000 from Rs 10,000.

In semi-urban branches, the average minimum balance requirement will rise to Rs 25,000 from Rs 5,000, while in rural regions, the requirement will double to Rs 10,000 from Rs 5,000.

The change will  will apply only to new savings bank accounts opened after August 1, 2025, while employee salary accounts remain unaffected by the changes and operate under distinct guidelines.

ICICI had previously been an early adopter among private sector banks when it raised balance thresholds in 2015.

Account holders who fall short of these requirements will incur penalties calculated at 6% of the deficit amount or Rs 500, whichever is lower.

Senior citizens continue to receive exemptions from these penalty charges.

ICIC Bank has also increased its service charges for cash transactions. 

Customers will be permitted three complimentary transactions per month for cash deposits at branches and cash recycler machines. After the complimentary transactions, each transaction will be charged at Rs 150. 

The bank also said that a cumulative monthly value limit of Rs 1 lakh is available without charge. However, beyond this limit Rs 3.5 per Rs 1,000 or Rs 150, whichever is higher, will apply. Third-party cash deposits are capped at Rs 25,000 per transaction.

For ATM transactions at non-ICICI Bank ATMs in six metro locations -- Mumbai, New Delhi, Chennai, Kolkata, Bengaluru, and Hyderabad -- the lender will levy Rs 23 per financial transaction and Rs 8.5 per non-financial transaction after the first three transactions in a month.

ICICI's move to raise the minimum balance requirement in savings account drew flak from public as well as a rival bank but some also defended it.

Kotak Mahindra Bank's top executive Jay Kotak in an X post said, "Every Indian must access our financial sector. 90% of India makes less than Rs 25,000 a month. A Rs 50,000 minimum balance implies a sum equal to ~94% of Indians monthly income is to be left with the bank at all times, else a fee."

"Implication: Physical cost to serve may be high. Digital first is the way. If banks don’t do it, fintechs will. Banking should be for all Indians," he added.

A Reddit user while lauding ICICI for enabling ease of banking remarked, "I do feel ICICI should have been a little considerate with revised minimum balance numbers. I'm pretty sure many service class people are not left with 50K by last week of a month owing to so many expenses in metros."

Another Reddit user in defense of ICICI's move said, "It’s a good idea probably to keep out the cattle class. In a free business environment let each player carve out his constituency and serve them in the best way possible. Core competency leads to innovation and higher profits. Slowly ICICI may give option to existing customers to either maintain the new higher balance or close their accounts. There are other players to serve the hoi polloi."