Current Affairs - Banking

ICICI Bank, India’s second-largest private sector lender, has announced a significant hike in its Minimum Average Balance (MAB) requirements for metro, urban, semi-urban, and rural branches, effective August 2025. This revision marks the first such steep increase among private banks, with metro and urban branches seeing the MAB raised from ₹10,000 to ₹50,000, semi-urban from ₹5,000 to ₹25,000, and rural from ₹2,500 to ₹10,000. The policy also introduces stricter penalties for non-maintenance and revised cash transaction limits. This move has sparked discussions on the rising banking cost burden, especially when many public sector banks are reducing or waiving similar charges.

AU Small Finance Bank has made history by becoming the first Small Finance Bank in India to receive the Reserve Bank of India’s in-principle approval to transition into a Universal Bank. This marks a significant milestone in its journey from a vehicle financing business to a niche financial institution and now to a full-spectrum banking provider. The upgrade will allow AU to expand its services to include corporate lending, wealth management, forex operations, and broader digital banking solutions. The move reflects AU’s strong governance, financial performance, and compliance standards, setting a precedent for other well-performing SFBs in India.

The Reserve Bank of India has granted approval to Warburg Pincus, a global private equity firm, to acquire up to a 9.99% stake in IDFC First Bank. This strategic investment, amounting to ₹4,876 crore (approximately $587 million), will be made via Warburg’s affiliate, Currant Sea Investments B.V. The transaction involves the purchase of about 81.27 crore Compulsorily Convertible Preference Shares (CCPS) at a price of ₹60 each. This move is expected to strengthen the capital base of IDFC First Bank and reflects increasing investor confidence in India's private banking sector.

The State Bank of India (SBI) was honoured as the World’s Best Consumer Bank for 2025 by Global Finance magazine, a prestigious recognition reflecting its leadership in customer-focused and technology-driven banking. As India’s largest public sector bank, SBI has prioritised digital transformation, financial inclusion, and rural outreach to deliver seamless and accessible services to its vast customer base. Key innovations like vernacular voice banking, AI-powered personalisation, and 24/7 digital support have positioned SBI as a global benchmark in retail banking. This accolade highlights not only the bank’s evolution but also India’s growing presence in the international financial landscape.

The State Bank of India (SBI) made history on July 22, 2025, by raising ₹25,000 crore through a Qualified Institutional Placement (QIP), marking the largest such fundraising in the Indian capital market. The issue was oversubscribed 4.5 times, reflecting immense investor confidence in SBI’s robust fundamentals, long-term growth strategy, and India’s economic outlook. The QIP attracted significant interest from both foreign and domestic institutional investors and was priced at a premium of ₹817 per share. The capital raised will enhance SBI’s Common Equity Tier-1 ratio, support credit expansion across retail, MSME, and corporate segments, and bolster its leadership in digital banking and financial resilience.