The BSBDA 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.
According to the RBI website, “BSBDA can also be opened with simplified KYC norms. However, if BSBDA is opened on the basis of Simplified KYC, the accounts would additionally be treated as “BSBDA-Small Account” and would be subject to the conditions stipulated for such accounts as indicated in para 2.6 (iii) of Master Circular No.UBD.BPD.(PCB).MC. No.16 /12.05.001/2012-13 dated July 1, 2013.”
Free services
The services available free in the ‘Basic Savings Bank Deposit Account’ will include 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.
If BSBDA customers have more than 4 withdrawals and request for cheque book at additional cost, will it cease to be a BSBDA?
Yes. The services limit above the minimum required has been left up to the banks, who can either provide extra services for free or develop requirements including pricing structures for additional value-added services on a reasonable and transparent basis, to be applied in a non-discriminatory manner, with prior notification to the customers.
However, if the bank does not levy any additional charges and offers more facilities free than those prescribed under BDBDA a/cs without minimum balance then such a/cs can be classified as BSBDA.
Annual ATM Debit Card charges
Banks should offer the ATM Debit Cards free of charge and no Annual fee should be levied on such Cards, as per RBI. And balance enquiry through ATMs will not be counted in the four withdrawals allowed free of charge at ATMs.
Individuals can convert their standard savings account into a BSBDA. However, these customers should be notified of the features and scope of services offered by BSBDAs, and they should consent in writing.
According to the SBI website, these are the service charges
- Basic RuPay ATM-cum-Debit card will be issued free of cost and no annual maintenance charge will be applied.
- Receipt/ credit of money through electronic payment channels like NEFT/RTGS will be free.
- Deposit/ collection of cheques drawn by Central/State Government will be free.
- No Account closure charges.
Features of SBI BSBDA
- Balance at any point of time should not exceed Rs 50,000/-.
- Aggregate of all withdrawals and transfers in a month should not exceed Rs 10,000/-.
- Aggregate of all credits in a Financial Year should not exceed Rs. 1.00 lac.
- If the balance exceeds Rs. 50,000/- or total credit in the account exceeds Rs. 1,00,000/- in a year, no further transaction will be permitted until the full KYC procedure is completed
- Maximum 4 withdrawals in a month, including ATM withdrawals at own and other Bank’s ATMs and transactions through other mode including RTGS/NEFT/Clearing/Branch cash withdrawal/transfer/internet debits/standing instructions/EMI, etc. No further customer debits would be allowed during the month.
- Foreign Remittances are not allowed to be credited into a Small Account unless the identity of the client is fully established through the production of officially valid documents.
- A Small Account shall remain operational initially for a period of twelve months, and thereafter for a further period of twelve months if the holder of such an account provides evidence before the Bank of having applied for any of the officially valid documents within twelve months of the opening of account, with the entire relaxation provisions to be reviewed in respect of the said account after twenty four months.
If KYC documents are not submitted to the Bank within 24 months of opening of the account, no further transaction other than for closure of account will be permitted.
Conversion of Small account to regular Savings Bank account or BSBD account (at the option of the customer) would be done by the home branch manually on full compliance with KYC requirement. After such conversion, the same account number will continue.
According to HDFC Bank, these conditions on a BSBDA Account
Since the BSBDA is a no frills zero balance account, there are a few conditions placed on it. The idea is for the account to serve someone from the economically weaker section, and keeping those customers in mind, the conditions are valid.
- An upper monetary limit to the balance that can be maintained in this account i.e Rs. 50,000
- An upper monetary limit to the total of credits made to this account in a year, i.e Rs. 1,00,000
- An upper monetary limit to the withdrawals made in a particular month i.e Rs. 10,000
- A maximum of 4 withdrawals in a particular month
- In case the account doesn’t satisfy these conditions, the bank can convert it to a Regular Savings Account as well.
- In the same bank, a customer cannot have both a conventional savings account and a BSBDA account. If the account user complies with the requirements and regulations, the bank may convert a conventional savings account into a BSBDA account.
