Jay Kotak, co-head of Kotak811 and son of veteran banker Uday Kotak, on Monday took to X to criticise ICICI Bank’s decision to raise the minimum average balance (MAB) for new savings accounts to Rs 50,000 from Rs 10,000.
Core of the Controversy
“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 around 94% of Indians’ monthly income is to be left with the bank at all times, else a fee!” said Kotak on the social media platform.
His comment has sparked a broader debate on financial inclusivity and the burden such policies place on middle-class Indians. This underscores the tension between premium banking strategies and the realities of India’s income distribution. Kotak’s advocacy for digital-first models aligns with his leadership role at Kotak811, which focuses on tech-driven financial solutions. He said, “Implication: physical cost to serve may be high. Digital first is the way. If banks don’t do it, fintechs will. Banking should be for all Indians.”
Physical Costs vs. Digital Solutions
Meanwhile, Reserve Bank of India governor Sanjay Malhotra said banks in India have the freedom to decide on the minimum balance requirement for customers to maintain their savings deposit account, as it does not fall under the regulator’s domain.
“The old limits seem to have been set a long time back, and therefore, the enhancement is likely to be more of a time correction,” said a senior banker on ICICI Bank raising its MAB for new clients.
While ICICI Bank’s decision is seen as a move towards mass affluence, the shift does not signal the end of mass inclusion. India’s Financial Inclusion Index rose to 67 in 2025, up 24.3% from prior years, reflecting continued progress in inclusion. This progress should reassure about the current state of banking in India. Financial access has also grown significantly, with 89% of Indian adults now having bank accounts, per the World Bank’s Global Findex 2025. And even today, most banks continue to offer zero-balance accounts for specific segments. As of August 4, there are 55.98 crore beneficiaries under the Pradhan Mantri Jan Dhan Yojana.
While wealth as a segment is becoming increasingly prominent in the banking space, financial inclusion efforts will persist, supported by government policies. Both affluent and mass-market segments are likely to succeed going forward.