India’s bank minimum balance rules have undergone major changes in 2025. While private sector banks are tightening requirements, public sector banks are moving toward customer-friendly zero-balance models. Here’s everything you need to know about the new rules, their impact on account holders, and what the Reserve Bank of India has to say.
Private Banks Tighten Minimum Balance Rules
Earlier this year, ICICI Bank triggered strong reactions after announcing a sharp hike in the Monthly Average Balance (MAB) for new savings accounts:
- ₹50,000 in metro and urban branches
- ₹25,000 in semi-urban branches
- ₹10,000 in rural branches
The move was criticized for being unrealistic and unaffordable for most Indians. Following public backlash, the bank rolled back the hike and revised its policy to:
- ₹15,000 for metro and urban branches
- ₹7,500 for semi-urban branches
- ₹2,500 for rural branches
Other private banks have also maintained or adjusted their MAB rules:
- HDFC Bank: ₹10,000 in urban, ₹5,000 in semi-urban, ₹2,500 in rural branches; penalties up to ₹600.
- Kotak Mahindra Bank: Zero-balance via Kotak 811; other accounts require higher balances, with penalties capped at ₹600.
- Axis Bank: ₹10,000 MAB across locations or ₹50,000 via fixed deposit.
- Yes Bank: Ranges from ₹2,500 to ₹50,000 depending on the account tier.
- IndusInd and IDFC First Bank: Offer a mix of zero-balance and tiered accounts with varied penalties.
Public Sector Banks Embrace Zero-Balance
Unlike private lenders, public sector banks are leaning toward financial inclusion. Many of them have waived penalties and minimum balance requirements altogether.
- SBI removed minimum balance charges back in 2020.
- In 2025, PNB, Canara Bank, Indian Bank, and Bank of Baroda also scrapped minimum balance penalties.
Additionally, the RBI-mandated Basic Savings Bank Deposit Account (BSBDA) ensures every citizen can access a zero-balance account with simplified KYC.
RBI’s Position
The Reserve Bank of India has clarified that minimum balance policies are not centrally regulated. Instead, individual banks have the autonomy to set their own requirements.
This has resulted in wide variations across the banking sector—some banks demand high balances, while others offer zero-balance accounts to attract customers.
What It Means for Customers
- Know the Rules: Every bank has different minimum balance policies; check carefully before opening an account.
- Zero-Balance Accounts Are Safer: Public sector banks and BSBDA accounts are ideal for low-income customers.
- Penalties Can Hurt: In private banks, falling short of the minimum balance can lead to charges up to ₹600 or 6% of the shortfall.
- Look for Flexibility: Some banks let you maintain fixed deposits instead of cash balance to meet MAB requirements.
- Stay Updated: Banks revise their rules often—always check the latest notifications.
Quick Comparison
| Bank Type | Minimum Balance Policy Highlights |
|---|---|
| ICICI Bank | ₹15,000 urban, ₹7,500 semi-urban, ₹2,500 rural (new accounts) |
| HDFC Bank | ₹10,000 urban, ₹5,000 semi-urban, ₹2,500 rural |
| Kotak Mahindra Bank | Zero-balance (Kotak 811) and premium high-balance accounts |
| Axis Bank | ₹10,000 MAB or ₹50,000 fixed deposit |
| Public Sector Banks | Most have moved to zero-balance accounts |
| RBI | Leaves MAB rules to banks, not regulated centrally |
Conclusion
The new minimum balance rules in 2025 highlight the growing divide between private and public sector banks. While private banks are raising requirements to boost deposits, public banks are leaning toward inclusivity and customer-friendly zero-balance models.
For account holders, the key takeaway is simple: always check your bank’s minimum balance rules before opening or maintaining an account. With penalties and requirements varying widely, staying informed is the best way to avoid unnecessary charges.