RBI replaces ‘no-frills’ account with basic savings account

 

MUMBAI:  RBI today asked banks to drop the ‘no-frills’ tag from the basic saving accounts as the nomenclature has become a stigma. It has asked the banks to provide zero balance facility in the  basic banking accounts along with ATM-cum-debit cards without any extra charge. “With a view to doing away with the stigma associated with the nomenclature ‘no-frills’ account and making the basic banking facilities available in a more uniform manner across banking system, it has been decided to modify the guidelines on opening of basic banking ‘no-frills’ accounts,” RBI said in a circular to the scheduled commercial banks. The central bank had introduced ‘no-frills’ accounts in 2005 to provide basic banking facilities to poor and promote financial inclusion. The accounts could be maintained without or with very low minimum balance. RBI has asked the banks to convert the existing ‘no-frills’ accounts into ‘Basic Savings Bank Deposit Accounts’. While there will be no limit on the number of deposits that can be made in a month,  Basic Savings Bank Deposit Account holders will be allowed a maximum of four withdrawals in a month, including through ATMs. “This account shall not have the requirement of any minimum balance…Further, no charge will be levied for non-operation/activation of in-operative ‘Basic Savings Bank Deposit Account’,” the RBI said.

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