Banks Free to Decide Minimum Balance for Savings Accounts: RBI Governor

Decision lies outside regulatory jurisdiction, says Sanjay Malhotra

Reserve Bank of India (RBI) Governor Sanjay Malhotra clarified on Monday that the decision to set minimum balance requirements for savings accounts rests solely with individual banks and does not fall under regulatory purview.

 

Speaking at a financial inclusion event in Gujarat, Malhotra was asked about the RBI’s stance on ICICI Bank’s recently revised rule that mandates a minimum balance of ₹50,000 for new savings accounts in metro and urban areas, effective August 1, 2025. He responded that “fixing the minimum balance is the prerogative of banks.”

 

Malhotra pointed out that some banks have set the limit at ₹10,000, while others have fixed it at ₹2,000, and many have waived the requirement entirely for their customers. “This decision does not come under the jurisdiction of the RBI,” he reiterated.

 

Meanwhile, ICICI Bank has defended its new policy, stating that customers opening a second or subsequent savings account in metro and urban regions must maintain an average monthly balance of ₹50,000 to avoid penalties.

The Governor’s remarks underline the flexibility banks have in determining balance norms, while also highlighting the competitive approaches adopted across the sector.