RBI Issues Draft Directions To Revamp Basic Savings Bank Deposit Accounts, Seeks Public Feedback
Moneylife Digital Team 03 October 2025
Reserve Bank of India (RBI) has issued draft directions for the basic savings bank deposit (BSBD) account, proposing a revamp of rules to make such accounts more customer-friendly and aligned with the growing digitalisation of banking. The draft, released for public comments, aims to improve customer service, enhance usage of BSBD accounts and deepen financial inclusion.
 
BSBD accounts, often described as 'no-frills' accounts, are designed to provide affordable and basic banking facilities without requiring a minimum balance. Under the draft, every bank will be required to offer such an account as part of its normal services, with a set of minimum facilities provided free of charge.
 
These include cash deposits at branches, ATMs or cash deposit machines; receipt of money through electronic channels or cheque collection; unlimited number and value of deposits in a month; a free ATM or ATM-cum-debit card with no annual fee; a cheque book with at least 25 leaves per year; internet and mobile banking; and a passbook or monthly account statement. A minimum of four free withdrawals per month, including transfers and ATM transactions, will be allowed, while digital payment transactions such as UPI (unified payments interface), NEFT (national electronic funds transfer), RTGS (real-time gross settlement), IMPS (immediate payment service) and point of sale (PoS) transfers will not count towards the withdrawal limit.
 
Banks must provide ATM cards, internet or mobile banking, or cheque books if a customer requests them at the time of opening a BSBD account, but customers cannot be compelled to opt for these facilities, the central bank clarified. Banks may offer additional services, with or without charges, but cannot insist on a minimum balance.
 
The draft further clarifies that a customer can hold only one BSBD account across banks, and cannot simultaneously hold another savings bank deposit account in the same bank. Customers with an existing savings account must close it within 30 days of opening a BSBD account, with banks given authority to close such accounts after notice if customers fail to comply. However, customers will remain eligible to open term deposit accounts. Existing savings accounts can also be converted into BSBD accounts within seven days of a written or online request.
 
RBI has emphasised that all BSBD accounts will remain subject to existing know-your-customer (KYC) and anti-money laundering (AML) norms. Banks will also be required to publicise the availability of BSBD accounts and explain their features clearly to customers, highlighting the differences from other savings account variants.
 
RBI says the directions, to be called the Reserve Bank of India (Basic Savings Bank Deposit Account) Directions, 2025, will come into effect no later than 31 March 2026 and will be applicable to all banks.
 
With these draft directions, RBI also proposes to repeal earlier circulars on BSBD accounts. Public comments have been sought before finalising the norms, which are intended to ensure greater transparency, better service and wider access to banking.
Comments
parimalshah1
7 months ago
Draft document Item 12. There should be a master list on the accessible common website showing persons having BSBD at whatever branch of any bank to avoid duplication. Declaration is like officially allowing those who want to cheat.
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