RBI asks banks to provide free facilities to savings bank account holders

Learn more about the RBI’s latest guidelines on making minimum facilities available free of charge to Basic Savings Bank Deposit Accounts.

RBI asks banks to provide free facilities to savings bank account holders

The Reserve Bank of India has asked banks to provide certain facilities to Basic Savings Bank Deposit Accounts (BSBDA) free of charge. This request is in line with the government’s financial inclusion drive and is aimed to provide minimum facilities like cheque book, ATM cards, a deposit of cash at bank branch etc. at no additional cost to the account holder. The bank will not be asking account holders for minimum balance maintenance for providing these services. The RBI has relaxed these norms on 10th June.

Notably, these facilities were treated as additional facilities earlier and attracted charges and the need to maintain a minimum balance.

Related: Understanding Your Savings Account

The banks can, however, provide additional service to these BSBDAs and they can continue to remain BSBD, provided the minimum services are provided free of charge. The banks can choose to or not charge for the additional facilities, depending on the disclosure. The BSBDA norms say that the account holder is not required to maintain any minimum balance and be able to avail the minimum services for free. There is no limit on the number and value of deposit one can do in a month in BSBDA.


What are BSBDA and its key features?

Basic Savings Bank Deposit Accounts don’t need any minimum balance and don’t charge for inoperative accounts. Thus it is tailor-made to meet the requirements of the weaker section of the society who often struggle to meet the minimum balance criteria. These accounts have a specific number of deposits and withdrawals allowed during the month and have an upper limit on balances and credits in the account.

What are the minimum facilities and advantages of the BSBDA?

With a BSBD account, the account holder gets a free passbook and ATM card (without any annual charge) and doesn’t need to pay for an inoperative account or failure to maintain a minimum balance. The services available free include deposit and withdrawal of cash, receipt of money through electronic payment means or through deposit/collection of cheques, at bank branches and ATMs.

Related: 5 Banks that give the best fixed deposit rate

Can BSBDA get converted to regular saving accounts?

If a BSBD account holder makes more than four withdrawals or request for cheque book at additional cost, the account can cease to be a BSBDA and becomes a regular account. However, if the bank doesn’t put any charge on such additional facilities or doesn’t require the need for minimum balance, this conversion will not happen.

The decision to allow services beyond the minimum specified limit lies with the bank. They can provide the same at no additional charge or enforcement of minimum balance criteria and devise a pricing mechanism in a consistent manner for other value-added services, thus keeping the account within the BSBD scope.

Inversely, regular accounts too can be converted into BSBD accounts. The account holder must give his or her consent in writing to the bank. The bank, in turn, must inform the account holder of the features of a BSBD account and the extent of service available under it. Here are some frequently asked questions about fixed deposit account. 

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