RBI adds host of services to basic savings accounts – The Times of India

MUMBAI: Reserve Bank of India has expanded the range of free services that any customer can receive from a zero-balance zero-fee basic savings bank deposit account, directing lenders to treat the product as a normal savings service rather than a stripped-down alternative.Banks have also been directed to convert existing accounts into BSBD accounts if they receive a request to that effect from customers. Under the new rules, every BSBD account must offer cash deposits, receipt of funds through electronic channels or cheque collection, and an unlimited number of deposits each month.Customers are entitled to an ATM or ATM-cum-debit card without annual charges, a cheque book with at least 25 leaves a year, free internet and mobile banking, and a free passbook or monthly statement, including a continuation passbook at no cost. At least four free withdrawals a month will be permitted, but digital payments — including PoS transactions, NEFT, RTGS, UPI and IMPS — will not be counted toward the withdrawal limit.Although the BSBD accounts were introduced in 2012, these accounts became widespread only after public sector banks opened these accounts in large numbers in campaign mode.According to banking sources private sector banks held only 2% of Jan Dhan Accounts which were in the nature of basic banking accounts. Now under the new circular, existing customers can switch their accounts to a BSBD account.The facilities must be provided only on request and banks cannot make their availing a precondition for opening or operating a BSBD account. Existing BSBD holders will receive the newly added free services once they place a request through physical or digital channels. Banks may offer additional chargeable features, but without enforcing a minimum-balance requirement, and customers can opt in at their discretion.No initial deposit will be needed to open a BSBD account and any savings account can be converted into one within seven days of a written request, including through digital channels.