Jay Kotak Slams ₹50,000 Minimum Balance Rule, Says It Ignores India’s Income Reality
Jay Kotak Slams ₹50,000 Minimum Balance Rule, Says It Ignores India’s Income Reality
ICICI Bank’s revised savings account terms spark debate over middle-class accessibility
Jay Kotak, son of veteran banker Uday Kotak, has criticised steep hikes in minimum average balance (MAB) requirements for new savings accounts, a change recently introduced by ICICI Bank, warning it would disproportionately burden India’s middle class. In a post on X, Kotak highlighted that 90% of Indians earn less than ₹25,000 a month, yet the new MAB for metro and urban customers opening accounts after August 1 is set at ₹50,000.
For these individuals, Kotak argued, keeping nearly an entire month’s income locked in the bank just to avoid penalties is impractical. “A ₹50,000 minimum balance implies a sum equal to around 94% of Indians’ monthly income is to be left with the bank at all times, else a fee!” he wrote, without naming ICICI Bank directly.
Under the new rules, older metro and urban customers must still maintain ₹10,000, while new semi-urban customers will need ₹25,000 and new rural customers ₹10,000. Older customers in rural and semi-urban areas retain lower requirements of ₹5,000. Falling short will attract a penalty of 6% of the shortfall or ₹500, whichever is lower. The bank has also capped free cash deposits at three per month, with each additional deposit costing ₹150.
Kotak also advocated for digital-first banking and fintech solutions, saying they offer lower costs and better accessibility for low- and middle-income customers. “For banks, the physical cost to serve is high, which is why digital-first banking is the future,” he noted, urging greater financial inclusivity in the sector.
