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Reserve Bank relaxes the norms for no-frills accounts

The RBI has said there should not be any limit on number and value of deposits that can be made in a month. (Express Photo by Pradip Das/File)

The Reserve Bank of India (RBI) on Monday relaxed the norms for the Basic Savings Bank Deposit (BSBD) accounts or popularly known as no-frills accounts allowing banks to provide cheque books and other facilities like minimum four withdrawals to basic account holders.

However, the banks cannot ask the BSBD account holders to maintain any minimum balance in lieu of such facilities.

Earlier, additional facilities made BSBD accounts like a normal savings account, thus attracting requirement of maintaining minimum balance and other charges. Banks are now advised to offer… basic minimum facilities in the BSBD account, free of charge, without any requirement of minimum balance, the RBI said in a notification.

The new facilities allowed for BSBD accounts include deposit of cash at bank branch as well as ATMs and receipt/ credit of money through any electronic channel or by means of deposit /collection of cheques drawn by central/ state government agencies and departments.

The RBI has said there should not be any limit on number and value of deposits that can be made in a month. It has allowed minimum of four withdrawals in a month, including ATM withdrawals. It also allowed ATM card or ATM-cum-debit card for such accoounts. The BSBD account should be considered a normal banking service available to all, the RBI said.

The minimum free withdrawals available to the BSBD account holders can be made at all ATMs (own-bank or other bank ATMs), it said.

According to the RBI, banks are free to provide additional value-added services, including issue of cheque book, beyond the above minimum facilities, which may/ may not be priced (in non-discriminatory manner) subject to disclosure. The availment of such additional services should be at the option of the customers, it said.

However, while offering such additional services, banks should not require the customer to maintain a minimum balance. Offering such additional services will not make it a non-BSBD account, so long as the prescribed minimum services are provided free of charge, it said.

The RBI said the Basic Savings Bank Deposit (BSBD) account was designed as a savings account which will offer certain minimum facilities, free of charge, to the holders of such accounts. In the interest of better customer service, it has been decided to make certain changes in the facilities associated with the account, it said.

The new norms will come into effect from July 1, 2019.

However, the holders of BSBD 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 or she will be required to close it within 30 days from the date of opening a BSBD account. Further, before opening a BSBD account, a bank should take a declaration from the customer that he is not having a BSBD account in any other bank, it said.