New Delhi: Jay Kotak, son of Uday Kotak, has slammed ICICI Bank for raising the minimum average monthly balance for metro and urban savings account holders to Rs 50,000. According to Kotak, several middle-class employees in India still earn Rs 25,000 per month and a minimum balance of Rs 50,000 means that almost 94 percent of their monthly income would always be left with the bank.
90 Percent Of Indians Earn Less Than Rs 25,000 Every Month: Jay Kotak
Jay Kotak, the co-head of Kotak811, said that 90 percent of Indians earn less than Rs 25,000 every month. If these people are required to maintain a minimum balance of Rs 50,000, then it will mean that around 94 percent of their monthly income will be left with the bank at all times. “Every Indian must access our financial sector. 90% of India makes less than Rs 25,000 a month. A Rs 50,000 minimum balance implies a sum equal to 94% of Indians monthly income is to be left with the bank at all times, else a fee!” Jay Kotak tweeted on the social media platform X.
Kotak pointed out that banks have a high physical cost of service, thus, digital banking is the solution. If banks are unable to adopt it, then fintechs will. “Implication: physical cost to serve may be high. Digital first is the way. If banks don’t do it, fintechs will,” he said.
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Kotak emphasized that the financial sector should be accessible to all Indians, and every individual must have access to it. “Banking should be for all Indians,” he said.
ICICI Bank raises minimum average monthly balance to Rs 50K
According to ICICI Bank’s latest notification, the minimum average monthly balance requirement for metro and urban savings account holders will be increased to Rs 50,000 for new accounts, effective August 1.
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The minimum average balance of ICICI Bank is the steepest among major Indian banks, having increased from the previous level of Rs 10,000. A penalty of 6 percent of the shortfall or Rs 500 will be imposed on customers who fail to maintain the minimum average balance.
