RBI Decision: Banks Free to Set Savings Account Minimums!
RBI allows banks to set their own savings account minimum balances.
Reserve Bank of India (RBI) Governor Sanjay Malhotra declared that banks have full autonomy to set minimum balance requirements for savings accounts, as this matter lies outside the RBI's regulatory oversight. Speaking to reporters at a 'Financial Inclusion Saturation Drive' event in Gozaria village, Gujarat's Mehsana district, Malhotra clarified, "The RBI has left it to individual banks to decide on what minimum balance they want to set. Some banks have kept it at Rs 10,000, some have kept Rs 2,000, and some have exempted customers."
This statement follows recent moves by private lender ICICI Bank, which, effective August 1, 2025, raised its minimum average monthly balance (MAB) for new savings accounts to Rs 50,000 in urban areas, a fivefold increase from Rs 10,000. For semi-urban and rural locations, the MAB was similarly hiked to Rs 25,000 and Rs 10,000, respectively. In contrast, public sector banks like the State Bank of India have taken a different approach, waiving penalties for customers who fail to maintain minimum balances, particularly for Jan Dhan accounts. Many public sector banks have eliminated minimum balance requirements altogether, aligning with financial inclusion goals.
Malhotra, speaking at the event, emphasized the importance of digital literacy in today’s era, likening it to traditional education. "If you do not have digital literacy, you will not progress," he stated, underscoring its role in accessing modern banking services. He highlighted the Pradhan Mantri Jan Dhan scheme, launched a decade ago, as a cornerstone of financial inclusion, ensuring banking access for all. However, he noted that opening an account is merely the first step, urging citizens to leverage associated benefits like accident insurance, life insurance, and the Atal Pension Yojana.
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Bank of Baroda’s Managing Director and CEO, Debadatta Chand, also spoke at the event, stressing the need to regularly update 'Know Your Customer' (KYC) details to keep Jan Dhan accounts operational. The event included the distribution of Atal Pension Yojana insurance certificates and accident claim insurance to families of deceased beneficiaries in Gozaria village.
Malhotra concluded by emphasizing that all financial decisions must prioritize the welfare of society’s most marginalized. "To get proper banking service is your right," he asserted, encouraging citizens to fully utilize government-backed financial schemes.
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