In a bid to take its financial inclusion philosophy forward in terms of providing banking services to all, the Reserve Bank of India (RBI) on 10 August 2012 advised all banks to offer a basic savings deposit account.
Most banks, including IDBI Bank Ltd, have started offering the basic savings account facility. This account aims at providing normal banking services to all citizens of the country. The basic savings account replaces the earlier “no-frills” account, which came with nil or minimum charges and was meant for the low-income group.
Replacing no-frills account
According to the RBI notification, 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 the banking system, it has been decided to modify the guidelines on opening of basic banking “no-frills” accounts.
The no-frills account came with certain restrictions, which varied from bank to bank. While some banks offered no-frills account to individuals who earned below Rs.10,000 per month, a few others offered this service to individuals who maintained less than Rs.50,000 at any given point.
But limitations remain
Like the no-frills account, this account too provides basic services such as deposit and withdrawal of cash at the bank branch and automated teller machines (ATMs) and electronic payment channels such as Internet banking, among others, and requires minimal paperwork. Though the limitations that were applicable on no-frills accounts have been removed, some others have been introduced.
Here, you can withdraw money only four times in a month, including withdrawals from ATMs. After the first four withdrawals, you will either be charged a fee or will be denied withdrawal, depending on the bank. Also if you are a basic savings bank deposit account holder, you will not be eligible to open any other savings bank deposit account in the same bank. So if you had a savings bank deposit account in that bank, which you had opened with a minimum balance amount, you will have to close it within 30 days from the date of opening a basic savings bank deposit account.
Who is it for?
This account, too, is basically for the low-income group. Children or students who are beginning to learn to save can also benefit from this account.
As of now, other that a salary account which offers zero balance option, all banks have a minimum balance requirement for normal savings account.