Two days after ICICI Financial institution sharply hiked the minimal month-to-month common stability (MAB) requirement in buyer accounts to Rs 50,000, Reserve Financial institution Governor Sanjay Malhotra stated the MAB requirement is “not beneath regulatory area”.
“The RBI has left it to the banks to determine on the minimal stability. Each financial institution has its personal minimal stability requirement. This isn’t beneath any regulatory area,” Malhotra stated on the sidelines of an occasion. This implies every financial institution is free to repair any quantity it wishes because the minimal month-to-month common stability in accounts.
The ICICI transfer has come at a time when public sector banks have been scrapping the MAB requirement.
ICICI Financial institution, the nation’s second-largest non-public lender, sharply elevated the minimal month-to-month common stability from Rs 10,000 to Rs 50,000 for all accounts opened in metro and concrete areas beginning August 2025. For semi-urban branches, the brand new MAB requirement has elevated to Rs 25,000 from Rs 5,000 earlier. Within the case of rural branches, accounts would require a minimal stability of Rs 10,000, in comparison with the sooner Rs 2,500, in line with the financial institution.
ICICI Financial institution has stated if the minimal stability standards just isn’t met by the client, there shall be a penalty of 6 per cent of the shortfall in required MAB or Rs 500 whichever is decrease. ICICI Financial institution is the primary financial institution to go for a steep hike in MAB.
The nation’s largest lender, State Financial institution of India, has not levied non-maintenance penalties since March 2020.
In keeping with knowledge shared by Minister of State for Finance Pankaj Chaudhary in response to a query within the Rajya Sabha late final month, state-owned lenders collected Rs 8,932.98 crore as penal expenses on non-maintenance of minimal Common Month-to-month Steadiness within the 5 years beginning 2020-21 and as much as 2024-25.
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The information shared by the finance ministry got here days after Union Financial institution of India joined a bunch of different PSBs in waiving off penalties on non-maintenance of minimal balances, a problem that has been a delicate one for a while. Different PSBs which have ended these expenses from the continuing quarter embrace Canara Financial institution, Financial institution of Baroda, Punjab Nationwide Financial institution, Indian Financial institution, Financial institution of India, and Central Financial institution of India, the finance ministry stated on July 29.
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