What changed
RBI replaced paragraphs 86 to 92 of the Responsible Business Conduct Directions with new instructions for BSBD accounts. Key changes include: digital payment transactions (UPI, NEFT, RTGS, IMPS, PoS) are excluded from the four-free-withdrawal limit; banks must offer at least 25 cheque leaves per year free; and ATM/debit card, internet/mobile banking, and cheque book are provided only upon customer request. The definition of 'Digital Payment Transaction' is now aligned with the Payment and Settlement Systems Act, 2007.
What it means for you
Banks must redesign their BSBD account product to ensure unlimited free digital transactions and no charges for basic facilities like cheque books and passbooks. This will increase operational costs for banks due to free digital payments and cheque issuance, but it deepens financial inclusion by making banking truly affordable. Banks need to update their systems to track digital transactions separately from ATM withdrawals and ensure compliance by April 1, 2026.
What you must do
- Update BSBD account terms and conditions to reflect free digital transactions (UPI, NEFT, RTGS, IMPS, PoS) not counting toward the four-free-withdrawal limit.
- Ensure no minimum balance requirement and no charges for deposit, ATM card, internet/mobile banking, passbook, or cheque book (minimum 25 leaves/year).
- Implement a system to offer ATM/debit card, internet/mobile banking, and cheque book only upon customer request, not automatically.
- Align the definition of 'Digital Payment Transaction' with the Payment and Settlement Systems Act, 2007 in internal policies and customer communications.
- Prepare for compliance by April 1, 2026, or earlier if adopted voluntarily.
Who it affects
All commercial banks (excluding Small Finance Banks, Payments Banks, and Local Area Banks), BSBD account holders and prospective customers, Bank operations and product teams handling savings accounts, Compliance and legal departments
What is the new free withdrawal limit for BSBD accounts?
Banks must provide a minimum of four free withdrawals (including ATM and transfer transactions) per month. However, digital payment transactions like UPI, NEFT, RTGS, IMPS, and PoS are not counted as withdrawals, so they are unlimited and free.
Are banks required to issue a cheque book automatically?
No. The cheque book (minimum 25 leaves per year) must be offered only if the customer requests it, either at account opening or later. Similarly, ATM/debit card and internet/mobile banking are provided on request.
When do these new BSBD rules take effect?
The directions come into effect on April 1, 2026, or on the date of adoption by the bank, whichever is earlier. Banks are encouraged to implement them as soon as possible.