The Reserve Bank of India (RBI) logo.
Credit: Reuters File Photo
The Reserve Bank of India (RBI) has recently released a draft circular to provide zero balance accounts, also known as Basic Savings Bank Deposit Accounts (BSBDA), aiming to provide services like - easier, digital, transparent banking for low-income account holders.
In the past savings accounts would charge penalty fees if a minimum required average monthly balance (AMB) was not maintained.
But now, the new, specifically designed BSBD accounts offer essential banking services for free and do not make it mandatory for the account holder to maintain a minimum bank balance to avoid fee charging.
The apex bank has directed concerned banks to adopt these changed by March 31, 2026.
According to the draft, every bank should offer a BSBD account as a standard facility to all its customers along with the below free services:
Withdrawals and digital transactions
At least four free withdrawals including ATMS withdrawals and transfers, will be allowed to all BSBD account holders. But, digital transactions from these accounts will not be having specific withdrawal limits, encouraging customers to opt for digital channels.
Additional services
The bank will offer additional services (free or over transparent charges) without linking them to any minimum balance requirement. The customers will have the option to choose if they want, cheque books, debit cards, digital banking facilities at the time of opening the BSBD accounts.
Restrictions and customer declarations/One account per bank
RBI has clarified that a customer can have only one BSBD account. Bank will be requiring a declaration confirming that the person does not hold another zero balance account in the bank.
Conversion of existing accounts
Existing customer have the option to convert their regular savings accounts into BSBD accounts upon request which will be done by the banks within 7 days of receiving the request.