What changed
RBI has finalized the Basic Savings Bank Deposit (BSBD) account directions for Urban Co-operative Banks (UCBs) after public consultation. The new rules replace paragraphs 66 to 73 of the existing Responsible Business Conduct Directions, 2025, and introduce a definition for 'Digital Payment Transaction' (same as 'Electronic Funds Transfer' under PSS Act, 2007). UCBs are encouraged to adopt these changes early, with a mandatory effective date of April 1, 2026.
What it means for you
UCBs must now offer BSBD accounts with free basic facilities like cash deposits, ATM cards (upon request), cheque books (minimum 25 leaves/year, upon request), internet/mobile banking (upon request), and passbooks, without any minimum balance requirement. Digital payment transactions (e.g., UPI, NEFT, RTGS, IMPS, excluding ATM transactions) are excluded from the monthly withdrawal limit of four free transactions, reducing costs for customers. This aligns UCBs with broader financial inclusion goals and may increase operational costs initially, but can drive account usage and customer loyalty.
What you must do
- Update your BSBD account product to include all mandated free facilities and remove minimum balance requirements.
- Ensure systems track digital payment transactions (excluding ATM transactions) separately from ATM/withdrawal counts to avoid charging for them.
- Train staff to offer ATM cards, cheque books, and digital banking only upon customer request, without insisting on them.
- Prepare to implement these directions by April 1, 2026, or earlier if adopted voluntarily.
- Review and amend internal policies and customer communication materials to reflect the new BSBD account features.
Who it affects
Urban Co-operative Banks (UCBs), BSBD account holders at UCBs, UCB operations and compliance teams, UCB product and marketing departments
What is the effective date for these new BSBD account directions?
The directions come into effect on April 1, 2026, or on the date the UCB adopts them, whichever is earlier. UCBs are encouraged to implement them as soon as possible.
Are digital payment transactions counted as withdrawals under the free monthly limit?
No, digital payment transactions like UPI, NEFT, RTGS, and IMPS (excluding ATM transactions) are excluded from the monthly withdrawal limit of four free transactions. Only ATM withdrawals and other transfers count toward this limit.
Do UCBs have to provide ATM cards and cheque books to all BSBD account holders?
UCBs must offer these facilities only if the customer requests them, either at account opening or later. Banks cannot insist that customers take these facilities.