RBI: 'No-frills' replaces basic savings account

Business

oi-Sneha

By Sneha B K

Published: Saturday, August 11, 2012, 11:01 [IST]

Banks were advised in November 2005 to make available a basic banking 'no-frills' account either with 'nil' or very low minimum balance as well as charges that would make such accounts accessible to vast sections of population.

Now, banks are advised to offer a ‘Basic Savings Bank Deposit Account' which will offer following minimum common facilities to all their customers.

The ‘Basic Savings Bank Deposit Account' should be considered a normal banking service available to all.
This account shall not have the requirement of any minimum balance. The services available in the account will include deposit and withdrawal of cash at bank branch as well as ATMs.

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 will be provided.

However, the above facilities will be provided without any charges. Further, no charge will be levied for non-operation/activation of in-operative ‘Basic Savings Bank Deposit Account'.

The ‘Basic Savings Bank Deposit Account' would be subject to RBI instructions on Know Your Customer (KYC) / Anti-Money Laundering (AML) for opening of bank accounts issued from time to time. If such account is opened on the basis of simplified KYC norms, the account would additionally be treated as a ‘Small Account'.

However, 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'.

The existing basic banking ‘no-frills' accounts should be converted to ‘Basic Savings Bank Deposit Account' as per the instructions.

GoodReturns.in