This may prompt conversion of some SB A/Cs into BSBD A/Cs
Savings Bank (SB) account holders may want to consider converting one of their accounts into Basic Savings Bank Deposit (BSBD) accounts as the RBI has told Banks that those holding the latter cannot be charged issuance and annual renewal fee on their ATM card or ATM-cum-Debit Card and they have to be provided mobile and internet banking facility.
The aforementioned clauses have been incorporated in the Reserve Bank of India (Commercial Banks – Responsible Business Conduct) Amendment Directions, 2025, relating to BSBD Accounts.
BSBD focus
RBI said the amendments are aimed at providing affordable banking facilities to public, to drive enhanced usage of BSBD accounts and also in the interest of better customer service for BSBD account holders. The Amendment Directions come into effect from April 1, 2026 or on the date of adoption by the bank, whichever is earlier.
The central bank said a customer may convert his/her existing savings bank account to a BSBD account. The bank shall convert the existing savings bank account to BSBD account within seven days of receipt of request in writing from the customer for such conversion. Such an option shall also be provided to customers through digital channels.
The holder of a BSBD account will not be eligible to open another BSBD account in the same bank or any other bank.
BSBD accounts started off as “non-frills” accounts about two decades back, with RBI asking banks to offer them with either ‘nil’ or very low minimum balance as well as charges that would make them accessible to vast sections of the population.
The “no-frills” nomenclature was done away with in 2012 to remove the stigma associated with it. The RBI then asked banks to offer “Basic Savings Bank Deposit (BSBD) Account” as a savings bank account which offers certain minimum facilities, free of charge, to the holders of such accounts with an objective of deepening financial inclusion.
Among the significant changes that RBI effected in the Directions include the requirement that Banks’ offer customers ATM Card or ATM-cum-Debit Card without levying charges towards annual fee, either at the time of issuance or renewal.
Currently, SB account holders are charged annual fee of about ₹200 to ₹400 by banks.
Further, Banks will offer BSBDA customers’ internet and mobile banking facility (this was not available to them so far) and cheque book with minimum 25 cheque leaves per year.
Transaction limits
The Directions allow BSBD account holders minimum four free withdrawals, including transfers and ATM transactions (done either at the bank’s own ATM or another bank’s ATM), in a month. Digital payment transactions excluding ATM transactions, – Point of Sale transfers, NEFT, RTGS, UPI, IMPS, etc, will not be counted as withdrawals for this purpose.
The charges on digital payment transactions will be in accordance with guidelines issued by Department of Payment and Settlement Systems, Reserve Bank/National Payments Corporation of India/Government of India, as applicable.
In the extant directions allow minimum four withdrawals in a month, including ATM withdrawal.
Banking expert V Viswanathan said: “Except for the restriction on free withdrawals made through bank counters by way of cash/transfer and by way of cash in ATMs and free cheque book restricted to 25 leaves a year, there are practically no other restrictions.
“All digital payments except ATM transactions are not counted for arriving at number of withdrawals. A customer’s passbook/statement either in print or e-mail is also free if charge.”
He opined that any existing SB account holder would be willing to convert one of his operating accounts as BSBD account and operate all his transactions through this account.
“This is a very good move that will do a lot of good to the common man operating a normal SB account,” Viswanathan said.
Clauses relating to deposit of cash; receipt of money through any electronic channel or deposit/collection of cheques; and no limit on number and value of deposits that can be made in a month continue from the 2019 circular.
As at FY24-end, the banking system had 70.59 crore BSBD accounts, with outstanding of ₹2,99,795 crore, per RBI data. All scheduled commercial banks had SB deposits aggregating ₹63,41,043 crore as at FY24-end.
Published on December 4, 2025
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