The Reserve Bank of India has come out with a new advisory note which states that Basic Savings Bank Deposit (BSBD) accounts in all Primary (Urban) Co-operative Banks and all State or Central Co-operative Banks have to adhere to the new relaxed rules. The BSBD Account, also referred to as the zero-balance account, is a kind of a savings account which offers certain banking facilities, free of charge, to the account holders. There is no penalty for non-maintenance of a minimum balance in the zero balance account. The zero balance account can be opened in any bank.
RBI has decided to make certain changes in the facilities associated with the BSBD account and has asked the banks to offer certain basic minimum facilities in the BSBD account, free of charge, without any requirement of minimum balance. RBI has also clarified that the BSBD account shall be considered a normal banking service available to all. A zero-balance account suits those who do not wish to maintain a minimum balance in their account and have limited transactions in their account. The basic minimum facilities in the zero balance account to be effective from September 1, 2019 will be :
(i) Deposit of cash at bank branch as well as ATMs or Cash Deposit Machines
(ii) Receipt or credit of money through any electronic channel or by means of deposit or collection of cheques drawn by Central or State Government agencies and departments.
(iii) No limit on number and value of deposits that can be made in a month
(iv) Minimum of four withdrawals in a month, including ATM withdrawal
(v) ATM Card or ATM-cum-Debit Card
Additionally, if a bank wants to provide additional value-added services, including the issue of cheque book etc, it may do so with or without extra cost. However, such additional services will not make it a non-BSBD Account, so long as the prescribed minimum services are provided free of charge. The bank cannot insist the account holders in maintaining a minimum balance of additional services are provided in the zero-balance account.
As a zero-balance account holder, one is not eligible for opening any other savings bank deposit account in that bank. It means one can have either a savings account or BSBD account but not both of them. If you have a savings account in a bank but wish to open zero balance account, you will have to close the savings account within 30 days from the date of opening a zero-balance Account. Further, before opening a zero-balance account, you will be asked to furnish a declaration to the bank that you are not having a zero-balance account in any other bank.