Gozaria (Guj): Reserve Bank of India (RBI) Governor Sanjay Malhotra on Monday clarified that the minimum balance requirement for savings accounts is determined by individual banks, not the central bank.
Speaking at a ‘Financial Inclusion Saturation Drive’ event in Gozaria village, Mehsana district, Gujarat, Malhotra said, “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. It is not in the regulatory domain of RBI.”
The statement comes after ICICI Bank revised its minimum average monthly balance (MAB) from August 1. The private lender increased the MAB for new savings accounts in metro and urban branches to Rs 50,000 from Rs 10,000. For semi-urban and rural branches, the requirement rose to Rs 25,000 and Rs 10,000 respectively.
In contrast, State Bank of India has opted not to impose penalties on savings account holders for failing to maintain a minimum balance. Public sector banks generally have lower requirements, with Jan Dhan accounts exempted from such conditions. Addressing the gathering, Malhotra stressed the importance of digital literacy, saying, “Earlier they used to say if you do not study you will not prosper. In today’s age, this is the same for digital literacy. If you do not have digital literacy you will not progress.”
He noted that the Pradhan Mantri Jan Dhan Yojana was launched a decade ago to ensure universal access to banking. “Opening an account is just the beginning, a door has been opened,” he said, urging people to make use of schemes such as accident and life insurance, and the Atal Pension Yojana.
Bank of Baroda CEO Debadatta Chand highlighted the need for regularly updating KYC details to keep Jan Dhan accounts active.