Planning to open a Basic Savings Bank Deposit Account? Know the changes proposed by RBI

The Reserve Bank of India (RBI) on Wednesday, October 1, proposed to upgrade basic savings bank deposit (BSBD) account services aimed at making them customer-centric with wider access, stronger protection and digital integration. 

According to the central bank, banks shall offer a BSBD account, including free facilities, without having to maintain a minimum balance.

“The ongoing (digitisation) of the banking sector requires a BSBD account that is in sync with the customer’s evolving requirements. These directions are issued to improve customer service for BSBD account holders and enhance the usage thereof to deepen financial inclusion and (digitisation),” the RBI said. 

What is a BSBDA?

A Basic Savings Bank Deposit Account (BSBDA) is a no-frills, zero-balance savings account designed to promote financial inclusion by providing basic banking services to all individuals without any mandatory requirement for a minimum balance. 

BSBD accountholders can access free ATM and basic banking services like deposits and withdrawals (usually with a limit on free withdrawals per month). 

All accounts opened under the Pradhan Mantri Jan Dhan Yojana fall under the BSBDA category. Over 566 million such accounts have been opened with deposits exceeding ₹2.67 trillion till now, as per official government data. 

What does RBI propose to change?

RBI said that a BSBD account shall be available to all as a normal banking service. A bank shall offer certain basic minimum facilities in a BSBD account, free of charge, without any requirement of maintaining a minimum balance in such an account.

A, BSBD accounts shall have “No limit on the number and value of deposits that can be made in a month.”

It shall also offer an ATM Card or ATM-cum-Debit Card, a cheque book of at least 25 leaves annually, internet and mobile banking services and a passbook or monthly statement for free. 

BSBD accountholders shall also get at least four free withdrawals, including transfers and ATM transactions, per month.

All types of digital services, such as Unified Payments Interface (UPI), National Electronic Fund Transfer (NEFT), Real-time Gross Settlement (RTGS), Immediate Payment Service (IMPS) and Point of Sale (PoS), are unlimited under these accounts. 

Banks may also provide additional services, with or without a fee, in a non-discretionary and non-discriminatory manner, along with appropriate disclosures to the customer. 

While BSBD accountholders will not be able to open another such account in any bank, a customer can convert a savings bank deposit account into a BSBD account within seven days of request in writing. This option shall also be available to customers through the internet and mobile banking channels. 

Further, banks shall take a declaration from the customer that they won't open such an account with another bank before opening a BSBD account. 

Importantly, a customer will not be eligible to open any other savings bank account in the same bank. They can, however, open term-deposit accounts. 

This means customers can have only one BSBDA across the banking system. If a customer has a savings account in a bank and wants to open a BSBDA in the same bank, he/she shall close the savings account within 30 days.

“However, in case the customer does not submit an account closure request within the prescribed period, the bank shall serve a notice to the customer and provide him/her a period of another 30 days before closing the savings bank account(s) of the customer,” the RBI said on October 1. 

The RBI has asked banks to actively publicise the availability and features of BSBD accounts. Additionally, when a new customer enquires about a bank account, the lender shall clearly explain the difference between BSBDAs and other savings accounts. 

“Instructions issued vide these Directions shall be complied with as expeditiously as possible but not later than March 31, 2026,” the RBI said. 

The RBI also said, “the opening and operation of a BSBD account shall be subject to the instructions on KYC/AML issued by the Reserve Bank vide ‘Master Direction - Know Your Customer (KYC) Direction, 2016’, as amended from time to time.” 

Grievance redressal

The apex bank also aims to strengthen complaint handling measures and has directed banks to ensure faster resolution of customer complaints through the Internal Ombudsman system. 

Further, rural cooperative banks will be brought under the RBI Ombudsman Scheme, allowing customers to get faster resolution of complaints or unresolved issues through a direct recourse. 

These reforms are aimed at enhancing financial inclusion and providing free digital banking services to low-income and rural customers.