Tuesday, 21 July 2015

Basic Savings Bank Deposit Account (BSBDA)

What is the definition of “Basic Savings Bank Deposit Account” (BSBDA)?
All the existing ‘No-frills’ accounts

Whether the guidelines issued on ‘no-frills’ account with 'nil' or very low minimum balances will continue even after the introduction of ‘Basic Savings Bank Deposit Account’?

No. will offer minimum common facilities as stated therein. Banks are required to convert the existing 'no-frills' accounts’ into 'Basic Savings Bank Deposit Accounts'.


Can an Individual have any number of 'Basic Savings Bank Deposit Account' in one bank?

No. An individual is eligible to have only one 'Basic Savings Bank Deposit Account' in one bank.

Whether a 'Basic Savings Bank Deposit Account' holder can have any other savings bank account in that bank ?

Holders of 'Basic Savings Bank Deposit Account' will not be eligible for opening any other savings bank account in that bank. If a customer has any other existing savings bank 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'.

Can an individual have other deposit accounts where one holds 'Basic Savings Bank Deposit Account’?

Yes. One can have Term/Fixed Deposit, Recurring Deposit etc., accounts in the bank where one holds 'Basic Savings Bank Deposit Account'.

Whether the ‘Basic Savings Bank Deposit Account’ can be opened by only certain types of individuals like poor and weaker sections of the population?

No. The 'Basic Savings Bank Deposit Account' should be considered as a normal banking service available to all customers, through branches.

Whether there are any restrictions like age, income, amount etc criteria for opening BSBDA by banks for individuals?

No. Banks are advised not to impose restrictions like age and income criteria of the individual for opening BSBDA.

Is the 'Basic Savings Bank Deposit Account' a part of furthering the Financial Inclusion objectives of banks?

The aim of introducing 'Basic Savings Bank Deposit Account' is very much part of the efforts of RBI for furthering Financial Inclusion objectives.

What are KYC norms applicable to BSBDA accounts? Are there any relaxations in KYC norms for BSBDAs?

The 'Basic Savings Bank Deposit Account' 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:

  1. Total credits in such accounts should not exceed 1 lakh rupees in a year.
  2. Maximum balance in the account should not exceed fifty thousand rupees at any time
  3. The total of debits by way of cash withdrawals and transfers will not exceed 10,000 rupees in a month
  4. Remittances from abroad can not be credited to Small Accounts without completing normal KYC formalities
  5. 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.
What kinds of services are available free in the 'Basic Savings Bank Deposit Account’?
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.
There is no requirement for any initial deposit for opening a BSBDA.

[Ref : RBI]

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