RBI Updates BSBD Account Rules for Small Finance Banks

RBI/2025-26/104 DOR.MCS.REC.No.311/01-01-033/2025-26 December 04, 2025 Reserve Bank of India (Small Finance Banks - Responsible Business Conduct) Amendment Directions, 2025 The Basic Savings Bank Deposit (BSBD) Account was introduced as a savings bank account which offers certain minimum facilities, free of charge, to the holders of such accounts with an objective of deepening financial inclusion. In order to provide affordable banking facilities to public, to drive enhanced usage of BSBD accounts and also in the interest of better customer service for BSBD account holders, it was decided to review the extant instructions on BSBD account and accordingly, the draft Reserve Bank of India (Basic Savings Bank Deposit Account) Directions, 2025 was issued on October 1, 2025 for public consultation / feedback. The public / stakeholder feedback has since been analysed and it has been decided to issue the final instructions on BSBD account to Small Finance Banks (hereinafter individually referred to as a ‘bank’) through amendment to the Reserve Bank of India (Small Finance Banks - Responsible Business Conduct) Directions, 2025 . 2. Accordingly, in exercise of the powers conferred by section 35A of the Banking Regulation Act,1949, the Reserve Bank, being satisfied that it is necessary and expedient in public interest so to do, hereby issues the Amendment Directions hereinafter specified. 3. Short Title and Commencement (1) These Directions shall be called the Reserve Bank of India (Small Finance Banks - Responsible Business Conduct) Amendment Directions, 2025. (2) A bank is encouraged to implement the Amendment Directions as expeditiously as possible. These Directions shall come into effect on April 1, 2026 or on the date of adoption by the bank, whichever is earlier. 4. These Amendment Directions shall modify the Reserve Bank of India (Small Finance Banks - Responsible Business Conduct) Directions, 2025 as under: (1) In paragraph 4, the following definition shall be inserted after sub-paragraph 4(10), namely: “ 4(10a) Digital Payment Transaction shall have the same meaning as “Electronic Funds Transfer” defined in section 2(c) of the Payment and Settlement Systems Act, 2007”. (2) The paragraphs 86 to 92 shall be substituted with the instructions given below: “ 86. The Basic Savings Bank Deposit (BSBD) Account is designed as a savings account to provide affordable banking facilities to the public at large. Every bank shall offer a BSBD account which shall be considered a normal banking service available to all. A bank shall offer the following basic minimum facilities in a BSBD account, free of charge, without any requirement of minimum balance to be maintained in such an account. Deposit of cash. Receipt of money through any electronic channel or deposit / collection of cheques. No limit on number and value of deposits that can be made in a month. ATM Card or ATM-cum-Debit Card. Further, no charges shall be levied towards annual fee, either at the time of issuance or renewal. Cheque book with minimum 25 cheque leaves per year. Internet and mobile banking facility. Passbook or monthly statement of account in lieu of passbook, either in print or by email, as per request of the account holder. Further, issuance of a continuation passbook, on exhaustion of the pages in the previous passbook, shall not attract any charge. Minimum of four free withdrawals, including transfers and ATM transactions (done either at the bank’s own ATM or another bank’s ATM), in a month. Digital payment transactions excluding ATM transactions, i.e., Point of Sale transfers, NEFT, RTGS, UPI, IMPS, etc., shall not be counted as withdrawals for this purpose. The charges on digital payment transactions shall be in accordance with guidelines issued by Department of Payment and Settlement Systems, Reserve Bank / National Payments Corporation of India / Government of India, as applicable. 86A. The facilities of ATM / ATM-cum-Debit card or internet / mobile banking or cheque book shall be offered to a customer provided he / she requests for the same, whether at the time of opening the account or subsequently. A bank shall not insist that a customer necessarily avails these facilities while opening and/ or operating the BSBD account. 86B. In the case of existing BSBD accounts, a bank shall extend the newly introduced free facilities at clause (5) to (7) of paragraph 86 above upon receipt of a request from the customer. The bank shall facilitate existing BSBD account holders to submit such requests through physical as well as digital channels. 87. A bank may provide additional facilities beyond the above minimum in a BSBD account, with or without charges, in a non-discretionary and non-discriminatory manner with transparent disclosure to the customer. However, while doing so, the bank shall not require the customer to maintain a minimum balance in the BSBD account. The availment of such additional facilities shall be at the option of the customer. 88. Opening and operation of BSBD accounts shall be subject to the instructions on Know Your Customer / Anti Money Laundering issued by the Reserve Bank vide ‘ Reserve Bank of India (Small Finance Banks – Know Your Customer) Directions, 2025 ’, as amended from time to time. Further, BSBD accounts opened by or operated on behalf of minors shall be subject to the instructions contained in paragraphs 186 to 191 below of these Directions. 89. A bank, while opening a BSBD account, shall not impose any requirement of an initial minimum deposit. 90. A customer may convert his / her existing savings bank account to a BSBD account. The bank shall convert the existing savings bank account to BSBD account within seven days of receipt of request in writing from the customer for such conversion. Such an option shall also be provided to customers through digital channels. 91. The holder of a BSBD account shall not be eligible to open another BSBD account in the same bank or any other bank. Accordingly, before opening a new BSBD account or converting an existing savings bank account to a BSBD account, the bank shall obtain a declaration from the customer that he / she does not have a BSBD account in any bank. 92. A bank shall publicise the availability of BSBD account and its features to customers. The bank shall also convey the differences between BSBD account and various savings bank account variants offered by it when a customer approaches it to open a deposit account.” (Veena Srivastava) Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2025-26/104 · issued 04 Dec 2025. The plain-English explanation above is BankPulse’s own independent summary.

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