RBI Governor opens up about ICICI Bank’s Rs. 50,000 minimum balance rule, says ‘Not our regulatory domain’
RBI Governor Sanjay Malhotra talks about bank's autonomy on minimum balance requirements, re-KYC for PMJDY accounts. Read details here.
Reserve Bank of India Governor Sanjay Malhotra made it clear that banks can independently determine minimum balance amounts for savings accounts, after ICICI Bank increased it to Rs. 50,000 for new customers in urban and metro areas. According to Malhotra, this is not a decision that comes under the regulatory purview of the RBI, and each bank can individually fix minimum average balance (MAB) requirements.
On his Gujarat visit, Malhotra talked about the need for digital literacy, “Unless there is digital literacy, your education is incomplete.” he said. Malhotra also encouraged banks to ramp up their Banking Correspondents (BC) reach, offering low cost services in rural areas. With around 17 lakh BCs placed across the nation, those working honestly for 10-11 years are earning comparable to regular bank employees.
He also stated that the central bank has started re-KYC for Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts to avoid any possible fraud. The banks will do re-KYC of 10 crore PMJDY accounts this year, which will aim to secure the accounts and avoid misuse and frauds. Malhotra urged for the cooperation of the account holders for the process.
Unlike ICICI Bank’s decision, a number of state run banks such as State Bank of India (SBI), Punjab National Bank, Canara Bank, and Indian Bank have removed charges for failure to maintain minimum balances, with aiming to encourage financial inclusion. SBI was the first to follow this term in 2020, and others have followed it after that.
