The Reserve Bank of India (RBI) has proposed changes to how banks offer and manage Basic Savings Bank Deposit (BSBD) accounts, signalling a shift towards wider access, better digital services and stronger customer protection.
A draft circular released by the central bank outlines new obligations for banks and expanded rights for customers, especially low-income users who depend on these accounts.
What is a BSBD account and who uses it?
BSBD accounts—also known as zero-balance or no-frills accounts—are meant for individuals who cannot maintain minimum balance requirements.
All Jan Dhan Yojana accounts fall under this category. So far, over 566 million such accounts have been opened with deposits exceeding ₹2.67 trillion.
These accounts allow people to receive government benefits, make deposits and withdraw cash without minimum balance penalties.
Key changes proposed
The RBI has said that the current account structure needs to be updated to match the pace of digital adoption. The draft circular proposes the following:
Free core facilities
Banks will have to offer BSBD accounts without any minimum balance requirement. Customers must receive:
- Unlimited cash deposits at branches, ATMs or business correspondents
- Free ATM/debit cards
- At least 25 cheque leaves a year
- Passbook or monthly statements at no extra cost
- Internet and mobile banking access
Withdrawal and digital transaction rules
- Minimum four free withdrawals per month, including ATM transactions and branch transfers
- Unlimited free digital transactions via UPI, NEFT, RTGS, IMPS and PoS
Option to switch
Customers with regular savings bank accounts can ask banks to convert them into BSBD accounts.
Banks must now promote BSBD accounts
The RBI has directed banks to actively publicise the availability and features of BSBD accounts.
When a new customer approaches a bank, the lender must clearly explain the difference between BSBD accounts and other savings account variants.
Restrictions to prevent duplication
To ensure the benefit reaches the intended segment:
- One customer cannot hold more than one BSBD account across banks
- A customer cannot open another savings account in the same bank once a BSBD account is active
- Term deposits, however, are allowed
Banks will be required to take a self-declaration from applicants to ensure compliance.
Extra services may come with conditions
Banks may provide additional facilities beyond the mandated free services, but only if:
- The charges are transparent
- The services are offered in a non-discriminatory and non-discretionary manner
Improved grievance redressal planned
Alongside the proposed BSBD overhaul, the RBI has moved to strengthen complaint handling:
- The Internal Ombudsman system within banks is set to be reinforced for faster resolution of customer complaints.
- Rural cooperative banks will be brought under the RBI Ombudsman Scheme, giving their customers direct recourse for unresolved issues.
Source: CNBC TV18
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