The recent hike in MAB thresholds for several banks—e.g., Kotak Mahindra and YES Bank at ₹10,000, HDFC at ₹10,000*, Axis at ₹12,000**, ICICI at ₹15,000***—alongside the respective penalty charges and interest rates offered (ranging from ~2.5% for SBI to 3% for IDFC/RBL). These numbers reflect pre-August 2025 norms.
However, ICICI Bank shook up the status quo on August 1, hiking MAB requirements for new savings accounts drastically:
Urban/Metro: ₹50,000 (up from ₹10,000) Semi-Urban: ₹25,000 (from ₹5,000) Rural: ₹10,000 (from ₹2,500)
This change only applied to new accounts, leaving existing customers unaffected.
Following intense public criticism—highlighting concerns around financial exclusion and accessibility—the bank revised its stance:
The MAB was reduced to ₹15,000 for urban new accounts (from the previously announced ₹50,000). Semi-urban MAB was reset to ₹7,500, down from ₹25,000.
ICICI’s initial hike was among the steepest nationwide, especially when compared to public sector banks (PSBs) like SBI, Canara Bank, and PNB that have either eliminated MAB requirements entirely or waived penalties.
Other private banks such as HDFC, Kotak, YES Bank continue to impose MAB thresholds relative to account type and location, albeit more modest—notably lower than ICICI’s bold move.
RBI clarified that banks are free to set their own MAB rules, thus the divergence in strategy is a product of individual business models.
Case Study: “Ritu’s Banking Dilemma”
Scenario: Ritu (mid-30s, working professional, salary ~₹60,000/month) lives in Ahmedabad and holds an ICICI savings account since 2019 with ₹10,000 MAB.
She planned to open a second account for minor children in October 2025. Initially unaware of MAB changes, she prepared to deposit ₹50,000. After hearing news on social media, she was worried—₹50k is a significant amount to park in a low-yield account. Upon verification, she discovered that ICICI relaxed the requirement to ₹15,000 for new accounts—a relief. Alternatively, she considered opening a PSB zero-balance account like SBI’s for children, to avoid the burden entirely. She also researched AU Small Finance Bank for higher interest returns—especially if she could keep balances above ₹10 lakhs in FD—balancing liquidity and returns.
Outcome: Ritu opened a zero-balance SBI account for her children and maintained ₹15,000 in her ICICI new account. She also opened an FD with AU SFB for future savings due to attractive yield. This strategy saved her from unnecessary strain and maximized returns.
Insights & Strategic Takeaways for Account-Holders & Professionals
Always read the fine print before opening a new account—even well-known banks may revise terms drastically. If MAB increases, review account purpose—parents may prefer zero-balance PSB accounts for minors, while high-balance holders may benefit from tiered rates at AU SFB or IDFC.
Define financial goals: Is the purpose liquidity, safety, or optimized return? Choose between savings accounts, zero-balance, or small FDs accordingly. Keep an agile mindset: Monitor policy shifts—ICICI’s rollback shows that collective feedback and public sentiment can influence banking norms.
Advocate for inclusion: Rising MABs—especially if steep—can disproportionately affect modest-income earners. Financial professionals and policymakers should aim for accessible banking.
The surge—and subsequent recalibration—of MAB requirements by ICICI Bank underscores a pivotal challenge in banking between liquidity needs and inclusion imperatives. While banks need stable deposit bases, accessible financial products remain essential for equitable growth.
As financial professionals, we should champion transparency, choice, and user empowerment in banking—so every individual, regardless of income, can navigate financial services without undue strain.
What’s been your bank’s latest MAB policy? How did you adapt? Share your experience—I’d love to hear your story.
