RBI strikes off minimum balance requirement.
Mumbai: In a bid to deepen financial inclusion, the Reserve Bank of India (RBI) on Monday listed several services that banks will have to offer free of cost to account holders of ‘Basic Savings Bank Deposit (BSBD) account’, without any stipulation of a minimum balance.
The central bank, in a notification, stated that effective July 1 banks will have to offer for free a minimum of four withdrawals in a month, including ATM withdrawals. There should be no limit on the number and value of deposits that can be made in a month, and an ATM card or ATM-cum-debit card has to be provided to BSBD account holders.
On the same lines, deposit of cash at the bank branch as well as ATMs, receipt or credit of money through any electronic channel or by means of deposit /collection of cheques drawn by government agencies will also have to be offered free.
The minimum free withdrawals available to the BSBD account holders can be made at all ATMs, including other bank ATMs, said the RBI.
Unlike a savings account where a customer is required to maintain a minimum balance in his account, in a BSBD account, the account holder is not required to maintain a minimum or average monthly balance and are opened for the financial inclusion purpose.
The BSBD account shall be considered a normal banking service available to all, the RBI said.
Banks are free to provide additional value-added services, including issue of cheque book, beyond the above minimum facilities to basic account holders, however, the banks cannot ask the account holders to maintain a minimum balance in lieu of such facilities, the RBI said while easing the regulations BSBD accounts, popularly known as 'no-frills' accounts. Earlier, additional facilities made these accounts like regular savings account, thus attracting requirement of maintaining a minimum balance and other charges.
“Offering such additional services will not make it a non-BSBD Account, so long as the prescribed minimum services are provided free of charge,” the RBI said.
The RBI said the holders of BSBD account will not be eligible for opening any other savings bank deposit account in that bank. If a customer has any other existing savings bank deposit account in that bank, he/she will be required to close it within 30 days from the date of opening a BSBD account. Further, before opening a BSBD account, a bank should take a declaration from the customer that he/she is not having a BSBD account in any other bank.
Banks have been advised to frame board-approved policy/ operational guidelines in this regard.