Why is ICICI's minimum balance up 5x?

ICICI Bank, which last revised its average minimum account balance requirements in 2015, has raised the threshold for savings accounts in metro and urban areas to ₹50,000 from ₹10,000.

- Shayan Ghosh

In the surprise move, India's second-largest private-sector lender has also hiked the ask for semi-urban areas to ₹25,000 from ₹15,000 and for rural to ₹10,000 from ₹15,000.

Mint probes the reasons.

What are the new terms?

Urban customers who open savings bank accounts with ICICI Bank from 1 August will have to maintain a minimum average balance of ₹50,000.

Certain exemptions apply—the hike won't apply to existing account holders, salary accounts, basic savings deposit accounts, and zero-balance savings accounts opened as part of the Pradhan Mantri Jan Dhan Yojana.

The average minimum balance is calculated as the average of monthly day-end balances. Customers who fail to maintain this will have to pay a penalty of 6% of the shortfall or ₹500, whichever is lower. The penal charges are unchanged.

The possible reasons?