ICICI Bank is facing heat after hiking its savings account minimum balance by 5 times, and this time veteran banker Uday Kotak’s son Jay Kotak has spoken up against the move.
In a post on X without explicitly mentioning the ICICI Bank minimum balance hike, Jay Kotak said 90 per cent of Indians make less than ₹25,000 a month.
“Every Indian must access our financial sector. 90% of India makes less than ₹25,000 a month. A ₹50,000 minimum balance implies a sum equal to ~94% of Indians monthly income is to be left with the bank at all times, else a fee!,” he said.
Jay Kotak, who leads Kotak Mahindra Bank’s digital banking arm Kotak 811, said digital first is the way to go.
“Implication: physical cost to serve may be high. Digital first is the way. If banks don’t do it, fintechs will. Banking should be for all Indians.”
ICICI Bank minimum balance hike
The ICICI Bank minimum balance for savings account has been hiked from ₹10,000 to ₹50,000 for urban accounts. MAB (Minimum Account Balance) for semi-urban locations and rural locations have also been increased five times ₹ ₹25,000 and ₹10,000, respectively, according to information available on the ICICI Bank website.
Non-maintenance of ICICI Bank minimum balance will attract penalty, the bank said. The lender will charge 6 per cent of the shortfall in required MAB, or ₹500, whichever is lower, if you stay in an urban area and cannot maintain ₹50,000 account balance.
The changes are applicable to ICICI Bank savings accounts opened on or after August 1. The minimum balance remains ₹5,000 for old customers in rural and semi-urban areas. For old urban customers, the minimum account balance should be maintained at ₹10,000.
The ICICI Bank minimum balance hike was criticised by many, with social media users calling the move discriminatory and elitist.
A user wrote, “In a country where 23 crore people live below the poverty line, ICICI thinks ₹50,000 is a ‘minimum’. Masterstroke!”
In a letter to the finance secretary, ‘Bank Bachao Desh Bachao Manch’ termed the private lender’s decision as “unjust and regressive”.
“This retrograde decision undermines the principle of inclusive banking,” the forum’s joint conveners, Biswaranjan Ray and Soumya Datta, claimed.
