'90% of India makes less than ₹25k a month': Jay Kotak on middle-class hit as ICICI ups minimum balance

Jay Kotak, son of veteran banker Uday Kotak, has criticised steep hikes in minimum average balance requirements for savings accounts — a move recently implemented by ICICI Bank — warning that it forces middle-class Indians earning ₹25,000 or less a month to keep nearly all their income locked in the bank just to avoid penalties. 

Kotak, however, did not name the bank in his post.

In a post on X, Kotak said such thresholds ignore the country’s income reality. “Every Indian must access our financial sector. Ninety percent of India makes less than ₹25,000 a month. 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.

He defined the middle class as those with a monthly income below ₹25,000, adding that anyone above that earns more than 90% of the country. For such households, he argued, tying up almost an entire month’s earnings to avoid charges is impractical.

Kotak also promoted digital-first banking and fintech platforms as more customer-friendly and better suited 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 said.

According to ICICI Bank’s latest notification, effective August 1, customers in metro and urban areas opening savings accounts on or after that date must maintain a monthly average balance of ₹50,000 to avoid penalties. For older customers, the requirement remains ₹10,000.

New semi-urban account holders will have to maintain ₹25,000, while new rural customers must keep ₹10,000. For older customers in rural and semi-urban areas, the balance requirement remains ₹5,000.

Customers failing to maintain the MAB will face a penalty of 6% of the shortfall or ₹500, whichever is lower. Additionally, the bank now allows three complimentary cash deposits per month, after which each deposit will incur a ₹150 fee.