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RBI revised instructions for BSBD accounts

Published on July 16, 2019
Current context: RBI has revised its circular on Basic Savings Bank Deposit (BSBD) accounts
RBI revised instructions for BSBD accounts
  • As per the revised circular, Banks are advised to offer basic minimum facilities free of charge without any minimum balance requirement
  • There will be no limit on number and value of deposits made in a month
  • 4 minimum withdrawals in a month along with ATM withdrawals are allowed
  • Banks are free to provide additional value-added services, like issue of cheque book
  • The customers have option of the availment of such facilities
  • No minimum balance would be required to avail such additional services
  • The BSBD account can be converted into a normal saving account only at the written request of the customer
  • The banks would be penalized under RBI Banking Regulation Act,1949, if found for non-compliance of any instruction

BSBD Accounts:

  • RBI has mandated all banks to offer BSBD accounts to those looking to open a bank account
  • In a BSBD account, no minimum balance is required to be maintained
  • These accounts are aimed to enhance financial inclusion
  • The no-frill accounts also come under BSBD accounts

Question: 

Q.1 With respect to Basic Savings Bank Deposit (BSBD) accounts, which statement is correct?
a. A minimum balance is required
b. No minimum balance is required
c. Limit on the number of deposits
d. Banks charge for additional services
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