Basic Savings Bank Deposit Account

: What are No Frill Accounts ? Whether they are still offered by

banks in India ?
In November 2005, RBI had advised banks tomake available a basic
banking no-frills account with nil or very low minimum balance as well
as charges that would make such accounts accessible to vast sections of
population. In simple words a service or a product is called no frill when it
is offered at cheap rate by removing the extra features. Thus, the no frill
accounts when offered by banks did not require minimum balance amount
or the same was very low, but such accounts were allowed only limited
number of transactions or they were not allowed to have ATM cards or the
maximum amount that can be deposited was restricted
etc. Therefore, with the passage of time, such accounts got a stigma
general public was put to lot of inconvenience. At present banks do not
offer "No Frill Accounts" (See details below)

Q : What are BSBDA ? What is the full form of BSBDA ? What
facilities are offered by banks for BSBDA ?
Therefore, in suppression of the earlier guidelines of 2005, RBI in 2012
came out with fresh guidelines and asked banks to offer a Basic Savings
Bank Deposit Account which will offer following minimum common
facilities to all their customers. These guidelines inter-alia includes:-
(a)This account shall not have the requirement of any minimum
balance.
(b)The services available in the account will include deposit and
withdrawal of cash at bank branch as well as
ATMs; receipt/credit of money through electronic payment
channels or by means of deposit/collection of cheques drawn by
Central/State Government agencies and departments;
(c ) While there will be no limit on the number of deposits that
can be made in a month, account holders will be allowed a
maximum of four withdrawals in a month, including ATM
withdrawals; and
(d) Facility of ATM card or ATM-cum-Debit Card;
What are RBI Guidelines for BSBDA ?
As per RBI guidelines the above facilities are to be provided
without any charges. Further, no charge will be levied for non-
operation/activation of in-operative Basic Savings Bank Deposit
Account.
However, RBI allowed banks to evolve other requirements
including pricing structure for additional value-added services
beyond the stipulated basic minimum services on reasonable and
transparent basis and applied in a non-discriminatory manner.
The Basic Savings Bank Deposit Account is subject to KYC / AML
requirements for opening of bank accounts issued from time to
time. BSBDA would be subject to provisions of PML Act and Rules
and RBI instructions on Know Your Customer (KYC) / Anti-Money
Laundering (AML) for opening of bank accounts issued from time
to time. BSBDA can also be opened with simplified KYC norms.
However, if BSBDA is opened on the basis of Simplified KYC, the
accounts would additionally be treated as BSBDA-SMALL
account and would be subject to the conditions stipulated for such
accounts
It was also provided by RBI that the existing basic banking no-
frills accounts should be converted to Basic Savings Bank Deposit
Account. Thus, it is clear that now banks can not continue with
No Frill Accounts and the concept is no longer valid and all such
accounts must be termed as BSBDA. The aim of introducing 'Basic
Savings Bank Deposit Account' is very much part of the efforts of
RBI for furthering Financial Inclusion objectives.
However, the Holders of Basic Savings Bank Deposit Account were not
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 Basic Savings Bank Deposit Account. Moreover, it needs to be
noted that one individual can have only one BSBDA in one Bank. He can
not have any other Saving Bank account in the bank where he has opened
BSBDA. However, he can have Term/Fixed Deposit, Recurring Deposit
etc., accounts in the bank where he / she holds 'Basic Savings Bank Deposit
Account'.
Thus, in nut shell we can say that Basic Savings Bank Deposit Account
(BSBDA) is a Zero Balance Savings Account that takes care of your simple
banking needs with Free ATM card,

Q. What are the conditions stipulated for accounts which are
additionally to be treated as BSBDA-Small Account?
Ans : As notified in terms of Govt of India notification dated
December 16, 2010, BSBDA-Small Accounts (BSBDA when opened
on the basis of Simplified KYC, the accounts is treated as BSBDA-
SMALL account ) would be subject to the following conditions:
i. Total credits in such accounts should not exceed one lakh rupees
in a year.
ii. Maximum balance in the account should not exceed fifty
thousand rupees at any time
iii. The total of debits by way of cash withdrawals and transfers will
not exceed ten thousand rupees in a month
iv. Foreign remittances can not be credited to Small Accounts
without completing normal KYC formalities
v. Small accounts are valid for a period of 12 months initially which
may be extended by another 12 months if the person provides proof
of having applied for an Officially Valid Document.
vi. Small Accounts can only be opened at CBS linked branches of
banks or at such branches where it is possible to manually monitor
the fulfillments of the conditions