RBI Expands Free Facilities for Zero-Balance BSBD Accounts; Banks Given 7 Days to Process Requests

The Reserve Bank of India (RBI) has significantly broadened the range of free services offered under Basic Savings Bank Deposit (BSBD) or zero-balance accounts, directing banks to treat these accounts at par with regular savings accounts. The central bank has made it clear that BSBD accounts should not be seen as “inferior” or “limited-service” options.

According to new RBI guidelines, if a customer submits a written or online request, banks must convert an existing savings account into a BSBD account within seven days. These guidelines will come into effect from April 1 next year.

As per an Economic Times report, RBI has also instructed banks to provide mobile banking, internet banking, unlimited cash deposits, and both online and cheque-based fund transfer facilities for BSBD account holders. There will be no restriction on the number of cash deposits one can make in a month.

Free Facilities to Be Provided

• A free ATM or ATM-cum-debit card without any annual charges
• A cheque book with at least 25 leaves per year
• Free internet and mobile banking services
• Free passbook or monthly statement
• At least four free cash withdrawals per month

Importantly, digital transactions such as PoS card swipes, NEFT, RTGS, UPI, and IMPS will not be counted within the four free withdrawal limits.

Banks Cannot Impose Hidden Conditions

These services must be provided only on customer request, and banks cannot make them mandatory for opening or maintaining an account. Existing BSBD account holders can also avail the upgraded facilities upon request.

Banks may offer additional features; however, they cannot enforce a minimum balance requirement for these added services. Opening a BSBD account continues to remain completely free, with no initial deposit required.

RBI Rejects Banks’ Suggestions

Banks had proposed setting certain eligibility conditions based on customer income or profile before allowing BSBD account openings. RBI rejected this suggestion, stating that such restrictions defeat the purpose of providing an inclusive, low-cost banking product.

Banks also expressed concerns about the potential misuse of BSBD accounts for activities like money laundering and requested restrictions on internet and mobile banking access. RBI dismissed these concerns and insisted that digital services must remain available.

However, the central bank agreed to allow certain limitations on deposits or balances in minor accounts, as proposed by banks, to reduce operational risks.