Even after several decades of India gaining independence, one of the areas where a gap has remained conspicuous was financial inclusion. Large swathes of the population still kept their money in the form of cash at home without ever thinking of opening a bank account. Because of this, they have missed out on the opportunity to earn a return on their savings and invest money in instruments like mutual funds.
So a basic bank account for these first time bankers is something that was needed. In theory, a no-frills savings account with low charges and minimal requirements had been around for a long time, which were being offered by the public sector banks. But the reality was that the banks did not pay any attention to those accounts, let alone actively getting the marginalized populace to open such accounts.
In 2014, the Prime Minister’s Jan Dhan Yojana (PMJDY) came as a long overdue shot in the arm for actual financial inclusion. With strong monitoring and push from the PMO, all banks put in efforts to get Jan Dhan Accounts opened, and this met with reasonable success (if one discounts the fact that many of the newly opened Jan Dhan accounts were holding zero balances after they got opened).
But the other offshoot of the success of PMJDY was the renewed interest from bankers in the opening and operating of the Basic Savings Bank Accounts. As the largest bank of India, State Bank of India is in an ideal place to offer a Basic Savings Bank Deposit Account (BSBDA). Let us take a look at the primary features of the BSBDA offered by State Bank of India:
SBI Basic Savings Bank Deposit Account
- Account opening documents and KYC requirements are the same as for a regular SBI savings account.
- An individual can have only one BSBDA in State Bank of India.
- If a BSBDA is opened in SBI for an individual, he or she cannot have a savings account in SBI.
- The account holder can withdraw money from the account only four times in a month, inclusive of withdrawals at the branch and using ATM.
- There is no minimum balance requirement. Unlike Jan Dhan Account, there is no maximum limit of account balance.
- Zero annual charges for the basic RuPay debit card issued to account holder.
- No charges on remitting money through net banking.
- If Central Government cheques are deposited into the account, no banking charges are levied.
This example was just about SBI, but all other public sector banks and also private banks like ICICI Bank and Axis Bank now offer Basic Savings Bank Accounts.
Who can open it?
Anyone can open a BSBDA using regular KYC (know-your-customer) documents. You can also convert your existing savings account into a BSBDA, you need to give a request for the same.
If the customer already has a Savings Bank Account in the same bank, the same will have to be closed within 30 days of opening a Basic Savings Bank Deposit Account.
Even if you have a BSBA, you will be free to open fixed or recurring deposit accounts with the same bank.