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The RBI has directed all the banks to offer Basic Savings Bank Deposit accounts as part of its efforts to further its financial inclusion objectives. Based on the directive, banks will offer 'Basic Savings Bank Deposit Accounts' to all their customers. Called the Small Account, there would be no need for an initial deposit to open the account.
Banks offer interest for the BSBD Account that provides minimum common facilities. Banks would convert the existing 'no-frills' accounts’ into 'Basic Savings Bank Deposit Accounts' (BSBDA).
Conditions for opening a BSBD account
An individual is eligible to have only one 'Basic Savings Bank Deposit Account' in one bank. Holders of a 'Basic Savings Bank Deposit Account' will not be eligible to open any other savings account in that bank. If a customer has any other existing savings account in that bank, he /she would be required to close it within 30 days from the date of opening a 'Basic Savings Bank Deposit Account'.
However, the bank customer can have term/ fixed deposit and recurring deposit accounts in the bank where one holds a 'Basic Savings Bank Deposit Account'. The 'Basic Savings Bank Deposit Account' would be subject to provisions of the PML Act and Rules and RBI instructions on Know Your Customer (KYC) / Anti-Money Laundering (AML) for opening bank accounts issued from time to time.
Services
The RBI circular stipulated that the total credits in BSBDA accounts should not exceed Rs 1 lakh in a year and the maximum balance in the account should not exceed Rs 50,000 at any point of time. Also, the total of debits by way of cash withdrawals and transfers should not exceed Rs 10,000 in a month. Any Foreign remittances cannot be credited to small accounts without completing normal KYC formalities.
The services available free in the 'Basic Savings Bank Deposit Account’ will include deposit and withdrawal of cash; receipt /credit of money through electronic payment channels or by means of deposit /collection of cheques at bank branches as well as ATMs.
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