ICICI Bank Introduces Changes to Savings Account Charges.

ICICI Bank has revised service charges for savings accountholders, impacting cash deposits, withdrawals, ATM usage, and penalties for not maintaining the required monthly average balance (MAB) from August 1, 2025. The bank has introduced changes to MAB requirements, cash transaction charges, cash withdrawal at branches, and ATM interchange fees. Customers are advised to review the new rules carefully to avoid additional costs.

ICICI Bank has announced significant changes to its service charges and minimum average balance (MAB) requirements for savings accounts, effective August 1, 2025. The revisions, aimed at new customers, will impact cash deposits, withdrawals, ATM usage, and penalties for not maintaining the required balance.

Key Changes:

1. Minimum Average Balance (MAB) Requirements:
- For metro and urban areas, the MAB will increase to Rs 50,000 from Rs 10,000.
- For semi-urban branches, the MAB will rise to Rs 25,000 from Rs 5,000.
- For rural branches, the MAB will double to Rs 10,000 from Rs 5,000 [1].

2. Cash Transaction Charges:
- Customers will be allowed three complimentary deposits and withdrawals per month at branches or cash recycler machines.
- Each additional transaction will incur a fee of Rs 150 or Rs 3.5 per Rs 1,000, whichever is higher.
- Third-party deposits and withdrawals are capped at Rs 25,000 per transaction [1].

3. Cash Withdrawals at Branches:
- Similar to cash deposits, three free withdrawals per month are allowed.
- Each additional withdrawal will incur a fee of Rs 150 or Rs 3.5 per Rs 1,000, whichever is higher.
- Third-party withdrawals are also capped at Rs 25,000 per transaction [1].

4. ATM Usage Fees:
- For non-ICICI Bank ATMs in six metros, customers will be charged Rs 23 per financial transaction and Rs 8.5 per non-financial transaction after three free transactions per month [1].

5. Penalties for Non-Compliance:
- Customers failing to maintain the required balance will face a penalty of 6% of the shortfall or Rs 500, whichever is lower.
- Pensioners are exempt, and charges can be waived under the Family Banking program if the collective balance meets 1.5 times the eligibility criteria [3].

Impact and Analysis:

The changes signal a shift towards premiumization, aiming to attract affluent customers, improve cross-selling potential, and strengthen low-cost deposit inflows [3]. While the move may boost liquidity and net interest margin (NIM), it also risks customer churn, particularly among middle-income users who might switch to PSU banks offering zero-balance accounts or private peers with lower thresholds [3].

ICICI Bank's strategy of targeting high-value customers and optimizing its balance sheet could lead to higher customer deposits and stronger liquidity, supporting growth. However, the bank must adapt quickly if rivals offer more inclusive offerings to retain profitable customers despite churn risk [3].

References:

[1] https://economictimes.indiatimes.com/markets/stocks/news/icici-bank-shares-in-focus-after-hike-in-minimum-balance-requirement-for-new-savings-accounts/articleshow/123226651.cms
[2] https://m.economictimes.com/wealth/save/icici-bank-hikes-minimum-monthly-average-balance-in-metro-savings-accounts-by-400-to-rs-50000-from-aug-1-for-new-customers/articleshow/123202116.cms
[3] https://stocktwits.com/news-articles/markets/equity/icici-bank-minimum-balance-hike-may-boost-liquidity-but-risk-customer-churn-say-analysts/chruNvqRd4x