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Basic Savings Bank Deposit Account



Rajesh Goyal 

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Q : What are No Frill Accounts ?  Whether they are still offered by banks in India ?

In November 2005, RBI had advised banks tomake available a basic banking “no-frills” account with “nil” or  very low minimum balance as well as charges that would make such accounts accessible to vast sections of population.  In simple words a service or a product is called ‘no frill’ when it is offered at cheap rate by removing the extra features.   Thus, the no frill accounts when offered by banks did not require minimum balance amount or the same was very low,  but such accounts were allowed only limited number of transactions or they were not allowed to have ATM cards or the maximum amount that can be deposited was restricted etc.  Therefore,  with the passage of time, such accounts got a stigma general public was put to lot of inconvenience.  At present banks do not offer "No Frill Accounts" (See details below)


Q : What are BSBDA ?  What is the full form of BSBDA ? What facilities are offered by banks for BSBDA ?

Therefore, in suppression of the earlier guidelines of 2005, RBI in 2012 came out with fresh guidelines and asked banks to offer a ‘Basic Savings Bank Deposit Account’ which will offer following minimum common facilities to all their customers.   These guidelines inter-alia includes:-

(a)This account shall not have the requirement of any minimum balance.

(b)The services available in the account will include deposit and withdrawal of cash at bank branch as well as ATMs; receipt/credit of money through electronic payment channels or by means of deposit/collection of cheques drawn by Central/State Government agencies and departments;

   (c ) While there will be no limit on the number of deposits that can be made in a month, account holders will be allowed a maximum of four withdrawals in a month, including ATM withdrawals; and

(d)            Facility of ATM card or ATM-cum-Debit Card;


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What are RBI Guidelines for BSBDA ?

As per RBI guidelines the above facilities are to be provided without any charges.  Further, no charge will be levied for non-operation/activation of in-operative ‘Basic Savings Bank Deposit Account’.

However, RBI allowed banks to evolve other requirements including pricing structure for additional value-added services beyond the stipulated basic minimum services on reasonable and transparent basis and applied in a non-discriminatory manner.

The ‘Basic Savings Bank Deposit Account’ is subject to KYC / AML requirements for opening of bank accounts issued from time to time.   BSBDA  would be subject to provisions of PML Act and Rules and RBI instructions on Know Your Customer (KYC) / Anti-Money Laundering (AML) for opening of bank accounts issued from time to time. BSBDA can also be opened with simplified KYC norms. However, if BSBDA is opened on the basis of Simplified KYC, the accounts would additionally be treated as “BSBDA-SMALL account” and would be subject to the conditions stipulated for such accounts 

It was also provided by RBI that the existing basic banking ‘no-frills’ accounts should be converted to ‘Basic Savings Bank Deposit Account’.   Thus, it is clear that now banks can not continue with “No Frill Accounts” and the concept is no longer valid and all such accounts must be termed as BSBDA.   The aim of introducing 'Basic Savings Bank Deposit Account' is very much part of the efforts of RBI for furthering Financial Inclusion objectives.

However, the Holders of ‘Basic Savings Bank Deposit Account’ were not eligible for opening any other savings bank deposit account in that bank. If a customer has any other existing savings bank deposit account in that bank, he/she will be required to close it within 30 days from the date of opening a ‘Basic Savings Bank Deposit Account’.   Moreover, it needs to be noted that one individual can have only one BSBDA in one Bank.  He can not have any other Saving Bank account in the bank where he has opened BSBDA.   However, he can have Term/Fixed Deposit, Recurring Deposit etc., accounts in the bank where he / she holds 'Basic Savings Bank Deposit Account'.

Thus, in nut shell we can say that Basic Savings Bank Deposit Account (BSBDA) is a Zero Balance Savings Account that takes care of your simple banking needs with Free ATM card,


Q. What are the conditions stipulated for accounts which are additionally to be treated as ‘BSBDA-Small Account’?

Ans : As notified in terms of Govt of India notification dated December 16, 2010, BSBDA-Small Accounts (BSBDA when opened on the basis of Simplified KYC, the accounts is treated as “BSBDA-SMALL account” ) would be subject to the following conditions:

i. Total credits in such accounts should not exceed one lakh rupees in a year.

ii. Maximum balance in the account should not exceed fifty thousand rupees at any time

iii. The total of debits by way of cash withdrawals and transfers will not exceed ten thousand rupees in a month

iv. Foreign remittances can not be credited to Small Accounts without completing normal KYC formalities

v. Small accounts are valid for a period of 12 months initially which may be extended by another 12 months if the person provides proof of having applied for an Officially Valid Document.

vi. Small Accounts can only be opened at CBS linked branches of banks or at such branches where it is possible to manually monitor the fulfillments of the conditions


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