India’s second largest lender ICICI Bank raised the monthly minimum average balance requirement across customer cohorts, effective August 1. This is a way to increase the premium customer base, a banker said on conditions of anonymity.
Metro and urban customers, who opened their savings accounts on Aug. 1 or later, will need to maintain Rs 50,000 monthly average balance. This was earlier Rs 10,000, which will continue to remain the minimum average balance for older customers.
The new rates are available on the bank’s website. According to the banker quoted above, ICICI Bank is looking to build a customer base like some large foreign banks.
New customers in semi-urban areas will be required to maintain a minimum average balance of Rs 25,000 and rural customers will need to maintain Rs 10,000 from here. For older customers the minimum average balance remains at Rs 5,000 a month for both sets.
Customers who do not maintain the minimum average balance will be levied a penalty. This is set at 6% of the shortfall or Rs 500, whichever is lower.
The hike in minimum average balance is a major move by a large private lender at a time when other banks are looking to rationalise their penalties. India’s largest lender State Bank of India has previously removed all minimum account charges for customers.
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