RBI tells urban co-ops to change 'no frills' accounts into SB A/Cs

RBI tells urban co-ops to change 'no frills' accounts into SB A/Cs

RBI tells urban co-ops to change 'no frills' accounts into SB A/Cs

 The Reserve Bank of India (RBI), on Friday, asked the Urban Co-operatie Banks (UCBs) to convert the existing basic banking ‘no-frills’ accounts into ‘Basic Savings Bank Deposit Account.’

Also, the ‘Basic Savings Bank Deposit Account’ be treated as a normal banking service available to all and it should not have a requirement of any minimum balance, said RBI in a notification.

It also clarified that holders of ‘basic SB a/c’ will not be eligible for opening any other savings bank account in that bank. "If a customer has any other existing savings bank deposit account in that bank, they will be required to close it within 30 days from the date of opening a basic SB a/c," the apex bank added.

The services available in the account will include deposit and withdrawal of cash at bank branch as well as ATMs as well as receipt or credit of money through electronic payment channels or by means of deposit or collection of cheques drawn by Central/State Government agencies and departments.

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 or ATM-cum-Debit Card.  Also, these facilities will be provided without any charges.

Further, RBI clarified that no charge will be levied for non-operation or activation of in-operative basic SB a/c.

Above all, the UCBs are free to evolve other requirements including pricing structure for additional value-added services beyond the stipulated basic minimum services on reasonable and transparent basis and applied in a non-discriminatory manner.

At the same time, the basic SB a/c would be subject to RBI instructions on Know Your Customer (KYC) or 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’ and would be subject to conditions stipulated for such accounts as indicated in Master Circular.