Did you notice that now, for unused or dormant bank accounts, no more we receive message mentioning that we have negative balance figure like “credit balance of -973 Rs”. This is because now banks have a category of savings account called the BSBD Account or Basic Savings Bank Deposit Account. So now dormant accounts with no transactions are moved to this category. Let’s see today what is BSBD Bank Account?

It is really ironic that we live in a world where wealth is distributed evenly. What some of us spend on appetizers, many families lives on it for an entire week. The best way to tackle poverty is to bring people to financial inclusion. They should be attached to education, sanitation, opportunities & of course financial means.

BSBD plays a very big role in this. Not only socially, BSBD also paves way for us to have more number of bank accounts without paying exorbitant charges to the bank for the services we will never use.

What is BSBD Account?

RBI had advised all banks 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 the population.

Basic idea was to bring every individual person to close to the banking system. The fear of minimum charges or accumulating charges should be removed from minds of the account holders.

In addition to that to make banking facilities in a more uniform way, it was decided by RBI that to modify the guidelines on opening of basic banking ‘no-frills’ accounts. Keeping that in mind, in RBI circular RBI/2012-13/164 DBOD.No. Leg. C.35/09.07.005/2012-13 dated August 10, 2012 banks are directed to offer a ‘Basic Savings Bank Deposit Account’.

Please note: ALL BANKS OFFER BSBD SAVINGS ACCOUNT. This includes all Public Sector Banks, Private & Foreign banks like Citibank or HSBC.

Basic Saving Bank Deposit Account (BSBD Account) is a normal saving bank account which is available to every individual with no or minimal charges.

There are no age, income or amount criteria to open a BSBD Account. It’s to note that the  holder of a BSBD Account can’t maintain any other saving bank deposit account in that bank.

If that person has an existing bank account in that bank than he/she has to close it within 30 days from the date of opening of a Basic Saving Bank Deposit account.

Requirements to open a BSBD Account

As mentioned earlier that there are no age, income or amount criteria to open a Basic Saving Bank Deposit Account but as per RBI an individual need to follow the Know Your Customer (KYC) and Anti Money Laundering (AML) guidelines issued time to time. An applicant must need to present a valid identity & address proof in original at the time of opening a BSBD Account.

BSBD Account Features

• NO requirement of minimum balance.
• Upper balance – no cap.
• Initial deposit while opening the account is not required.
• Free ATM Cum Debit Card (generally a Rupay Card is provided. But few banks offer Visa/Mastercard)
• Free Passbook.
• Maximum 4 withdrawal transactions are allowed per month via ATM or withdrawal form available at branch and transaction through another mode including RTGS, NEFT, Clearing, Transfer, Internet Debits, Standing Instructions, EMI, etc.
• No further withdrawals are allowed in a whole
• Free Receipt/ credit of money through electronic payment channels like NEFT/RTGS
• Free Deposit/ collection of cheques drawn by Central/State Government
• The account can be open with joint applicant also.
• No charge on non-operative/activation of an inoperative

Above mentioned facilities are free in a Basic Saving Bank Deposit Account.

However, the decision to allow services beyond the minimum prescribed has been left to the discretion of the banks who can either offer additional services free of charge or make pricing structure for additional value-added services.

These value-added services must be charged with the consent of client on a reasonable and transparent basis. Such pricing structure for value added services or prescribe minimum balance requirements should be displayed prominently and also informed to the customers at the time of account opening.

Offering such additional facilities should be non-discretionary, non-discriminatory and transparent to all Basic Savings Bank Deposit Account customers. However such accounts enjoying additional facilities will not be treated as BSBD Account.

So now if you have a bank account you do not want to close you can convert them to BSBD Account.

The same account gets converted on request so you don’t have to change account details.

Hope you liked this information on BSBD Account. This will surely help you mitigate penalties paid to banks.

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