Financial Inclusion– Access to Banking Services – Basic Savings Bank Deposit Account
One of the primary requirements of achieving Financial Inclusion is the the access to a Basic Savings Bank Deposit Account.
The ‘no-frills’, banking account will soon die off and the existing ones will be converted into ‘Basic Savings Bank Deposit Account’
Reserve Bank of India, DBOD vide Notification No RBI/2012-13/164 DBOD.No. Leg. BC.35/09.07.005/2012-13 dt.August 10, 2012, has advised all Scheduled Commercial Banks to make available Basic Savings Bank Deposit Account in their Savings Bank portfolio.
Yes, you can view the notification here.
The Basic Savings Bank Deposit Account is in accordance with paragraphs 88 and 89 of Monetary Policy Statement for the year 2012-13 announced on April 17, 2012.
The concept of ‘no-frills’, account was first announced in November 2005. Over the years a sort of stigma was associated with the nomenclature ‘no-frills’ account, and by and large, it was not much of a success.
Hence, to make the basic banking facilities available in a more uniform manner across banking system, instructions contained in circular DBOD.No.Leg.BC. 44/09.07.005/2005-06 dated November 11, 2005 on Financial Inclusion, have been superseded and vide today’s circular Banks are advised to offer a ‘Basic Savings Bank Deposit Account’.
The following will have to be the minimum common facilities to all their customers:
i. The ‘Basic Savings Bank Deposit Account’ should be considered a normal banking service available to all.
ii. This account shall not have the requirement of any minimum balance.
iii. 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;
iv. 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 Facility of ATM card or ATM-cum-Debit Card;
No charges can be levied for the above facilities. No charge has to levied for non-operation/activation of in-operative ‘Basic Savings Bank Deposit Account’.
Banks are encouraged to offer additional value-added services as long as the pricing structure for such services is reasonable, transparent and non-discriminatory.
RBI instructions on Know Your Customer (KYC) / Anti-Money Laundering (AML) for opening of bank accounts issued from time to time, would be applicable to the ‘Basic Savings Bank Deposit Accounts’.
To discourage customers from opening multiple saving bank deposit account in the same bank, RBI has clarified that holders of ‘Basic Savings Bank Deposit 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 ‘Basic Savings Bank Deposit Account’.
So, now go ahead and demand from your bank a ‘Basic Savings Bank Deposit Account’.
2 points which will be more customer-friendly: –
The existing bank accounts should not be closed but converted into ‘Basic Savings Bank Deposit Bank Accounts’, as majority of the customers would have mentioned their existing Bank account numbers in many places.
AADHAAR should be part of ‘Basic Savings Bank Deposit Bank Accounts’ and customers should be eligible for only 1 ‘Basic Savings Bank Deposit Bank Account’, in the complete Banking industry.