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Basic Saving Bank Account Decoded

All the existing ‘No-frills’ accounts opened pursuant to guidelines issued vide circular UBD.BPD.Cir.No.19/13.01.000/2005-06 dated  November 24, 2005 and converted into BSBDA in compliance with the guidelines issued in circular  UBD.BPD.Cir.No.5/13.01.000/2012-13 dated August 17, 2012 as well as fresh accounts opened under the said circular should be treated as BSBDA.

– RBI’s Official site

bsbda

Let’s Break it!

  1. BSBDA is a savings account that can be opened by any individual or HUF (Hindu Undivided Family) who has no savings bank account in that bank.
  2. BSBDA is a basic bank account that does not require an initial deposit to start the account. There are no minimum balance maintenance requirements for this account.
  3. If a customer has any other existing savings bank account, it will be required to be closed within 30 days from the date of opening a Basic Savings Bank Deposit Account.
  4. The account offers free-of-cost banking facilities, such as ATMcum-debit card, deposit and withdrawal of fund, using electronic payment channels, deposit or collection of cheques at bank.
  5. BSBDA account holders are allowed four free cash withdrawals in a month, balance enquiry through ATM is free for any number of times.
In November 2005, RBI issued guidelines for basic banking “no-frills” account with “nil” or very low minimum balance. In simple words, a service or a product is called ‘no frill’ when it is offered at cheap rate by removing the extra features. At present banks do not offer “no frill accounts”. As per the RBI notification in 2012,all no frills accounts get converted into Basic savings bank deposit account(BSBDA).
15 best Features of BSBDA
  1. This account is considered as normal Banking service available to all.
  2. Zero balance maintenance.
  3. Services available are-Withdrawing money from Bank ATMs as well as Bank branches, receipt and credit or money through electronic transfer or deposit/collection drawn through Central Govt/Stage Govt and dept.
  4. Facility of ATM Debit card is available.
  5. Their is no limit for deposit of money in a month but withdrawal is limited to four including ATM withdrawal.
  6. Above facilities are free. Also no penalty on inactive accounts.
  7. An individual is eligible to have only one ‘Basic Savings Bank Deposit Account’ in one bank.
  8. Apart from the above said basic services, banks are free to charge for the any additional value added services but should be transparent.
  9. KYC and Anti Money Laundering rules and regulations apply to this account too.
  10. Suppose you have any other account with same branch then you need to close that account within 30 days of opening this account.
  11. Existing no-frill accounts will be converted to Basic Savings Bank Deposit Account.
  12. 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’.
  13. Despite BSBD Account One can have Term/Fixed Deposit, Recurring Deposit etc., accounts in the bank where one holds ‘Basic Savings Bank Deposit Account’.
  14. There is no restrictions like age, income, amount etc criteria for opening BSBDA by banks for individuals.
  15. In BSBDA, banks are required to provide free of charge minimum four withdrawals, including through ATM and other mode. Beyond four withdrawals, it is left to discretion of the banks to either offer free or charge for additional withdrawals.

Is there any difference between No Frills Account and BSBDA?

RBI said- All the existing “No-Frill” accounts may be treated as BSBDA accounts from the date of the circular i.e., August 17, 2012 and banks may offer the prescribed facilities as per the circular such as issuing ATM card etc., to the existing ‘No-Frill’ account holders as and when the customer approaches the bank. However, customers opening new accounts after the issue of our circular should be provided prescribed facilities immediately on opening of the account. In simple there is no difference between No Frills Account and BSBDA but latter has some additional advantages over the previous one.

Conditions to make any Simple account as BSBD Account

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.

References:
Basuvinesh Blog
Quora
Reserve Bank of India
The Economic Times

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