New RBI Updates For Basic Savings Bank Deposit Accounts: What You Need To Know

A Basic Savings Bank Deposit (BSBD) Account is a savings account intended to provide affordable banking access. It is meant to offer a minimum set of facilities free of charge. RBI reviewed the older BSBD instructions to improve affordability, increase usage, and improve customer service standards.

This update matters because it reduces ambiguity. It also reduces branch-level discretion. It sets a clear minimum that every covered bank must provide.

What Are the Mandatory Free Minimum Facilities in BSBD Accounts Now?

RBI now states that every covered bank must offer BSBD as a normal banking service. The account must be available to all. It must be offered free of charge. It must have no minimum balance requirement.

The minimum free facilities list is now explicit.

• Cash Deposits

  Users must be able to deposit cash into the account.

• Receiving Money

  Users must be able to receive money through any electronic channel, and also be able to deposit or collect cheques.

• Unlimited Deposits

  There is no limit on the number of deposits in a month or on the value of deposits in a month.

• Debit Card Without Annual Fee

  The bank must provide an ATM card or ATM-cum-debit card. No annual fee can be charged at issuance. No annual fee can be charged at renewal.

• Cheque Book

  A cheque book must be provided. It must have a minimum of 25 cheque leaves per year.

• Internet And Mobile Banking

  Internet and mobile banking must be made available as a facility.

• Passbook Or Monthly Statement

  The bank must provide a passbook. Or it must provide a monthly statement in lieu of passbook. The statement can be in print or by email. It must be as per the account holder’s request. A continuation passbook must be provided free when pages are exhausted.

What Is the New Rule on Free Withdrawals and What Counts?

RBI mandates a minimum of four free withdrawals per month. This includes transfers and ATM transactions. It applies whether the transaction is at the bank’s own ATM or another bank’s ATM.

This is a minimum standard. It is not a marketing promise. It is a regulatory requirement. It sets a baseline that banks must honour for BSBD customers.

Which Digital Transactions Will Not Be Counted as Withdrawals?

This is one of the most important clarifications in the amendment. RBI states that digital payment transactions, excluding ATM transactions, will not be counted as withdrawals for the four free withdrawals rule. These include Point of Sale transfers, NEFT, RTGS, UPI, and IMPS.

This changes how BSBD can be used in daily life. It protects digital usage. It also reduces the risk of customers being discouraged from using UPI or bank transfers.

RBI also notes that charges on digital payment transactions must follow the relevant guidelines of the Department of Payment and Settlement Systems, RBI, NPCI, or Government of India, as applicable.

What Does “On Request” Mean For Debit Cards, Cheque Books, And Digital Banking?

RBI adds a clear customer choice rule. The bank must offer the debit card facility, internet or mobile banking facility, and cheque book facility provided the customer requests it. The request can be made at account opening. It can also be made later.

At the same time, the bank cannot insist that the customer must take these facilities. The bank cannot make these facilities compulsory for opening or operating a BSBD account.

This clause matters for two reasons. It ensures access for customers who need these services. It also prevents forced bundling for customers who do not want them.

What Should Existing Customers Do, And How Does Conversion To BSBD Work?

RBI gives explicit instructions for existing BSBD account holders. For existing BSBD accounts, banks must extend newly introduced free facilities. This specifically covers the facilities related to cheque book, internet or mobile banking, and passbook or statement arrangements. The trigger is a customer request. Banks must accept requests through physical channels and digital channels.

RBI also clarifies conversion from an existing savings account to BSBD. A customer may convert an existing savings account to a BSBD account. The bank must complete the conversion within seven days of receiving a written request. The option must also be provided through digital channels.

There are also continuing conditions.

• BSBD opening and operation remains subject to KYC and AML requirements
• The bank cannot impose an initial minimum deposit requirement
• A BSBD holder cannot open another BSBD account in the same bank or any other bank
• The bank must obtain a declaration before opening or converting an account to BSBD
• Banks must publicise the availability and features of BSBD
• Banks must also explain differences between BSBD and other savings variants when a customer approaches to open a deposit account