In a recent clarification, RBI Governor Sanjay Malhotra stated that the Reserve Bank of India does not regulate minimum balance requirements for savings accounts. Instead, banks have full freedom to set their own policies. This announcement comes as ICICI Bank faces scrutiny for raising monthly average balance requirements for new customers.
During a financial inclusion event in Gujarat, Malhotra was asked about ICICI Bank’s decision. His response was clear: “This decision does not fall under the regulatory domain.” Essentially, the central bank sees this as a business decision left to individual banks rather than a matter for regulatory oversight.
The topic has sparked debate among customers, especially those who may struggle to meet higher balance demands. While some argue that banks should have flexibility to manage their deposit policies, others worry about accessibility for low-income users. Malhotra’s statement reinforces that banks hold the reins on this issue.
ICICI Bank’s move highlights a growing trend where institutions adjust account rules to manage costs and encourage higher deposits. Without RBI intervention, customers may see more banks tweaking their minimum balance mandates in the future. The central bank’s stance suggests it won’t step in unless broader financial stability or consumer protection concerns arise.
For now, customers will need to check with their banks to understand specific balance requirements. The RBI’s hands-off approach means policies could vary widely across institutions. While this gives banks operational flexibility, it also places the responsibility on customers to compare options.
Financial experts suggest that consumers weigh the pros and cons of different accounts before committing. Some banks may offer lower balance requirements but fewer perks, while others might impose strict rules but provide premium services. The RBI’s position leaves room for diverse banking strategies in a competitive market.