The Reserve Bank of India (RBI) has issued a significant directive to all banks, dramatically enhancing the value of basic savings accounts. The central bank has ordered lenders to expand the suite of free services available to customers holding a Basic Savings Bank Deposit (BSBD) account, treating it as a full-fledged savings service rather than a limited alternative.
What Are The New Free Facilities in BSBD Accounts?
Under the fresh guidelines, every BSBD account holder is entitled to a robust set of services at no cost. Banks must provide an ATM or an ATM-cum-debit card without any annual fee. Customers will also receive a cheque book with a minimum of 25 leaves every year. Furthermore, the accounts will come with free internet and mobile banking facilities, along with a free passbook or monthly statement. A continuation passbook will also be supplied without charge.
Critically, the RBI has mandated that these accounts must allow for unlimited deposits each month. This includes cash deposits, the receipt of funds via electronic payment channels, and cheque collection. While account holders are permitted at least four free withdrawals per month, a crucial relief is that digital payments will not be counted against this limit. Transactions made via Point-of-Sale (PoS) machines, NEFT, RTGS, UPI, and IMPS will remain unrestricted.
How Can Existing Customers Benefit?
The circular brings excellent news for existing bank customers. Any individual with a regular savings account can now request their bank to convert it into a BSBD account. Banks have been directed to execute this conversion within seven days of receiving a written request, which can be submitted through digital channels as well. Notably, no initial deposit is required to open a new BSBD account.
For the millions who already hold a BSBD account, the newly added free services will become available once they place a formal request through their bank's physical or digital channels. The RBI has made it clear that banks cannot force customers to avail of these facilities as a precondition for opening or operating the account; they must be provided only upon request.
A Push for Inclusive Banking
BSBD accounts were first introduced back in 2012, but they saw widespread adoption primarily after public sector banks launched them aggressively in campaign mode. The move is seen as a major step towards enhancing financial inclusion. Data reveals that private sector banks held a mere 2% of Jan Dhan accounts, which are similar in nature to basic banking accounts. This new directive aims to level the playing field and ensure uniform service standards across all banks.
While banks are allowed to offer additional features for a fee, they are strictly prohibited from enforcing any minimum balance requirement on these accounts. Customers have the complete discretion to opt-in for these paid add-ons. With these changes, the RBI is reinforcing its commitment to ensuring that basic banking is accessible, feature-rich, and truly free for every Indian citizen.
