Published on: August 9, 2025 at 16:44
From August 1, 2025, ICICI Bank is making a bold move that could change the way many Indians manage their savings accounts. The country’s second-largest private lender has announced a sharp five-fold hike in the Minimum Monthly Average Balance (MAB) for new savings account holders in metro and urban areas—from ₹10,000 to a hefty ₹50,000. While existing customers can breathe easy, this change signals a clear shift in the bank’s strategy towards high-value accounts. For some, it’s a wake-up call to manage funds more strategically; for others, it may mean exploring alternative banking options. Let’s break down what’s changing, why it matters, and how you can stay ahead without paying unnecessary penalties.
What’s Changing? The Big MAB Leap
ICICI Bank has announced a sharp increase in its Monthly Average Balance (MAB) requirement for new savings account holders. Starting August 1, 2025, customers in metro and urban areas opening new accounts must maintain a ₹50,000 average balance, up from the earlier ₹10,000—an eye-opening 400–500% jump.
| Customer Type | New MAB Requirement | Penalty if Shortfall |
|---|---|---|
| Metro/Urban (new) | ₹50,000 month’s average | 6% of shortfall or ₹500 |
| Semi-Urban (new) | ₹25,000 | Same as above |
| Rural (new) | ₹10,000 | Same as above |
| Existing Customers | Unchanged (metro/urban: ₹10K) | Existing terms apply |
For semi-urban customers, the new threshold is ₹25,000, and for rural customers, it’s ₹10,000—all applicable only to new accounts opened on or after August 1, 2025.
Also Read: UPI Breaks Records: Over 707 Million Transactions in a Single Day on August 2, 2025
How MAB (Monthly Average Balance) is Calculated
The Monthly Average Balance (MAB) is the average of your daily closing balances over the month. Banks add up the closing balance for each day of the month and then divide it by the total number of days in that month.
Example:
If in August (31 days), your daily closing balances total ₹15,50,000, then:
MAB = ₹15,50,000 ÷ 31 = ₹50,000
Tip: You can’t maintain a high balance for just a few days to meet the MAB—it needs to be consistent across the month to avoid penalties.
Why This Matters: Impact on You
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Steep threshold for new customers: Existing account holders are unaffected—for new savers, this means deeper pockets or reconsideration of banking strategy.
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Penalty alert: If the MAB falls short, ICICI Bank charges a penalty of 6% of the shortfall or ₹500 (whichever is lower).
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Competitive shift: While many banks have lowered or waived MAB requirements (e.g., SBI dropped them altogether in 2020), ICICI’s move bucks the trend and reinforces a focus on high-value accounts.
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Financial inclusion concerns: The policy draws criticism for potentially sidelining low-income groups from formal banking access.
Smart Moves: What You Should Do
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Check your account type: If you’re opening a new savings account in an urban/metro area, prepare for the ₹50,000 MAB commitment.
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Calculate to avoid surprises: MAB is calculated as the sum of your daily closing balances divided by the days in the month—so keep your balance consistently high, not just on select days.
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If ₹50K is too high, explore options:
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Opt for Basic Savings and Bank Deposit Account (BSBDA) which has zero or minimal MAB and is meant for full financial inclusion.
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Consider other banks with lower or no MAB mandates, especially if convenience or low balance flexibility matters.
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Track your MAB: ICICI Bank’s app and net banking provide tools to check your current and required MAB—use them to stay aligned
ICICI Bank’s decision to raise the Minimum Monthly Average Balance for new metro and urban savings accounts to ₹50,000 marks a significant shift in India’s retail banking landscape. While this move may strengthen the bank’s premium positioning, it also places a heavier financial responsibility on new customers. By understanding the MAB calculation, monitoring your balance, and exploring alternative account types if needed, you can avoid penalties and keep your banking stress-free. As the August 2025 deadline approaches, staying informed and making proactive choices will ensure that your money works for you—without unexpected charges eating into your savings.
FAQs – ICICI Bank MAB Hike 2025
Q1: From when will the new ICICI Bank MAB rules apply?
From August 1, 2025, for new savings accounts.
Q2: What is the new MAB for metro/urban areas?
₹50,000 for new customers in metro and urban locations.
Q3: Are existing ICICI Bank customers affected?
No, the hike applies only to new accounts.
Q4: What happens if I don’t maintain the MAB?
A penalty of 6% of the shortfall or ₹500 (whichever is lower) will apply.
Q5: Can I open a low-balance account with ICICI?
Yes, you can choose the Basic Savings and Bank Deposit Account (BSBDA) with minimal or zero MAB.