New Delhi, Aug. 16 -- Earlier this month, ICICI Bank raised the minimum balance requirement for new account holders by four to five times, to as much as Rs.50,000. A public backlash prompted a partial rollback, but not a full retreat. In three of its four geographical categories, the bank still pushed through a 50% hike in the requirement for new accounts.

While the private sector lender offered no official reason, the move is widely seen as a bid to extract more value per customer amid pressure on margins.

A bank's core business is straightforward: it collects deposits through current accounts, savings accounts and term deposits, and lends that money at higher interest rates. The gap between what it earns and what it pays-its margin-is...