What changed
RBI superseded the 2005 'no-frills' account circular with a new 'Basic Savings Bank Deposit Account' (BSBDA) framework. The new account removes the 'no-frills' stigma and mandates uniform basic facilities: zero minimum balance, free deposits/withdrawals at branch and ATM, electronic credit, and ATM/debit card. Withdrawals are capped at four per month, but deposits have no limit.
What it means for you
Banks must offer BSBDA as a standard product with no minimum balance and free core services, ensuring financial inclusion without stigma. The four-withdrawal limit may affect customer usage patterns, but banks can charge for value-added services transparently. Existing no-frills accounts must be converted within 30 days, and customers cannot hold another savings account in the same bank.
What you must do
- Update product offerings to include BSBDA with zero minimum balance and free basic services as specified.
- Convert all existing 'no-frills' accounts to BSBDA and notify customers within 30 days.
- Ensure KYC/AML compliance; if simplified KYC is used, treat as 'Small Account' per Master Circular.
- Implement systems to enforce the four-withdrawal monthly limit and prevent multiple savings accounts per customer.
- Review and publish transparent pricing for any additional value-added services beyond the basic minimum.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Customers with existing 'no-frills' accounts, New customers seeking basic banking services
What is the maximum number of withdrawals allowed per month in a BSBDA?
Account holders are allowed a maximum of four withdrawals in a month, including ATM withdrawals.
Can a customer have both a BSBDA and a regular savings account in the same bank?
No. Holders of BSBDA are not eligible for any other savings bank deposit account in that bank. If they have an existing savings account, it must be closed within 30 days of opening the BSBDA.
Are there any charges for non-operation or activation of an in-operative BSBDA?
No, banks cannot levy any charge for non-operation or activation of an in-operative Basic Savings Bank Deposit Account.