The Reserve Bank of India (RBI) clarified on Monday that setting the minimum average balance (MAB) for savings accounts is the sole responsibility of individual banks. RBI Governor Sanjay Malhotra said that deciding the minimum balance is not the central bank’s responsibility during a financial inclusion event in Gujarat.
Malhotra explained that certain banks require customers to maintain a minimum balance of ₹10,000, while others have set it as low as ₹2,000. Ultimately, the decision on the minimum account balance rests with each individual bank.
Malhotra’s remarks come shortly after ICICI Bank, India’s second-largest private bank, raised its minimum monthly balance requirement to ₹50,000 for savings accounts opened after August 1, 2025, in metro and urban branches, a five-fold increase from before.
For semi-urban branches, ICICI increased the minimum balance to ₹25,000 per month, and ₹10,000 for rural branches, affecting customers in smaller towns and villages. Previously, these stood at ₹5,000 per month.
India’s public sector banks generally require lower minimum balances compared to private lenders, except for Jan Dhan accounts, which are zero-balance accounts. Many state-run banks have removed minimum balance rules altogether, allowing customers to avoid penalties by not maintaining a fixed balance.
Apart from minimum account balance requirements, Malhotra stressed that opening bank accounts is only the first step. He urged people to improve digital literacy to fully benefit from banking and government schemes like insurance and pensions.
Malhotra also encouraged citizens to use schemes such as accident insurance, life insurance and the Atal Pension Scheme. These programmes can provide important financial security and support for families.
The RBI Governor reminded people that proper banking services are their right. Digital skills and active use of banking can help individuals prosper in today’s economy and access government benefits easily.
