In India, financial inclusion programmes have seriously started with the launch of No Frills account by the RBI in 2005. This account offered minimum banking facilities to the new account holder by having a zero balance account. Hence this account became known as zero balance account.
Later, in 2012, with financial inclusion drive getting higher momentum the RBI has replaced No Frills account with Basic Savings Bank Deposit Account (BSBDA).
What is BSBDA?
Basic Savings Bank Deposit Account (BSBDA) is the standard account launched by the RBI and provided by banks that contains basic banking services to the financially excluded population.
They have replaced the no-frills accounts in 2012. Before the BASBDA, the type of basic bank account for promoting financial inclusion was the zero balance or no-frill accounts which was launched in 2005.
The significant feature of BSBDA is that contained a bouquet of basic banking services like savings, credit and money transfer facilities, ATM -cum debit card facilities with a simplified KYC norm. Account can be started and maintained with nil balance. Under PMJDY also, the bank account offered is BSBDA.
Following are the main features of BSDBA
The 'Basic Savings Bank Deposit Account' should be considered as a normal banking service available to all customers, through branches. BSBDA is applicable to all scheduled commercial banks in India including Foreign Banks having branches in India.
The services available free in the 'Basic Savings Bank Deposit Account’ includes deposit and withdrawal of cash; receipt / credit of money through electronic payment channels or by means of deposit / collection of cheques at bank branches as well as ATMs.
The 'Basic Savings Bank Deposit Account' would be subject to provisions of PML Act and Rules and RBI instructions on Know Your Customer (KYC) / Anti-Money Laundering (AML) for opening of bank accounts issued from time to time.
If 'Basic Savings Bank Deposit 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. Such accounts have restrictions on credit, maximum balance cash withdrawals etc.
Banks are advised not to impose restrictions like age and income criteria of the individual for opening BSBDA.
An individual is eligible to have only one 'Basic Savings Bank Deposit Account' in one bank.