Basic Savings Bank Deposit Account

The Basic Savings Bank Deposit Account has replaced the No frill account earlier introduced
by RBI. The major features of this savings bank account is under:

 The ‘Basic Savings Bank Deposit Account’ should be considered a normal banking
service available to all.

 This account shall not have the requirement of any minimum balance.

 The services available in the account will include deposit and withdrawal of cash at
bank branch as well as ATMs; receipt/credit of money through electronic payment
channels or by means of deposit/collection of cheques drawn by Central/State
Government agencies and departments;

 While there will be no limit on the number of deposits that can be made in a month,
account holders will be allowed a maximum of four withdrawals in a month,
including ATM withdrawals; and

 Facility of ATM card or ATM-cum-Debit Card;

 The above facilities will be provided without any charges.  Further, no charge will be
levied for non-operation/activation of in-operative ‘Basic Savings Bank Deposit
Account’.
 The ‘Basic Savings Bank Deposit Account’ are subject to RBI instructions on Know
Your Customer (KYC) / Anti-Money Laundering (AML) for opening of bank accounts
issued from time to time. If such account is opened on the basis of simplified KYC
norms, the account would additionally be treated as a ‘Small Account’ and would be
subject to conditions stipulated for such accounts as indicated in paragraph 2.7 of
Master Circular DBOD. AML. BC. No. 11/14.01.001/2012-13 dated July 02, 2012 on
‘KYC norms/AML standards/Combating of Financing of Terrorism (CFT) /Obligation of
banks under PMLA, 2002’.

 Holders of ‘Basic Savings Bank Deposit Account’ will not be eligible for opening any
other savings bank deposit account in that bank. If a customer has any other existing
savings bank deposit account in that bank, he/she will be required to close it within
30 days from the date of opening a ‘Basic Savings Bank Deposit Account’.

A. Small Accounts

'Small account' means a savings account in a banking company where-

(i) the aggregate of all credits in a financial year does not exceed rupees one lakh;
(ii) the aggregate of all withdrawals and transfers in a month does not exceed rupees ten
thousand; and
(iii) the balance at any point of time does not exceed rupees fifty thousand .

3. Rule (2A) of the Notification lays down the detailed procedure for opening 'small
accounts'. Banks are advised to ensure adherence to the procedure provided in the Rules for
opening of small accounts.

Know your Customer:

Banks and financial institutions (FIs) have been advised to follow certain customer
identification procedure for opening of accounts and monitor transactions of suspicious
nature for the purpose of reporting the same to appropriate authority. The customer
identification is done by verifying the identity and residential address. The following
documents are treated as officially valid documents for the purpose:

Officially valid document” (OVD)

OVD means the passport, the driving licence, the Permanent Account Number (PAN) Card,
the Voter's Identity Card issued by the Election Commission of India, job card issued by
NREGA duly signed by an officer of the State Government, letter issued by the Unique
Identification Authority of India containing details of name, address and Aadhaar number, or
any other document as notified by the Central Government in consultation with the
Regulator.

(i) Provided that where ‘simplified measures’ are applied for verifying the identity of the
clients the following documents shall be deemed to be OVD:

a. identity card with applicant’s Photograph issued by Central/ State Government

Departments, Statutory/ Regulatory Authorities, Public Sector Undertakings,
Scheduled Commercial Banks, and Public Financial Institutions;

b. Letter issued by a gazetted officer, with a duly attested photograph of the person.

(ii) Provided further that where ‘simplified measures’ are applied for verifying for the limited
purpose of proof of address the following additional documents are deemed to be OVDs :.

a. Utility bill which is not more than two months old of any service provider (electricity,
telephone, post-paid mobile phone, piped gas, water bill);

b. Property or Municipal Tax receipt;

c. Bank account or Post Office savings bank account statement;

d. Pension or family pension payment orders (PPOs) issued to retired employees by

Government Departments or Public Sector Undertakings, if they contain the address;

e. Letter of allotment of accommodation from employer issued by State or Central

Government departments, statutory or regulatory bodies, public sector
 undertakings, scheduled commercial banks, financial institutions and listed
companies. Similarly, leave and license agreements with such employers allotting
official accommodation; and

f. Documents issued by Government departments of foreign jurisdictions and letter

issued by Foreign Embassy or Mission in India.

g. It is further advised that where a bank has relied exclusively on any of these two
documents, viz. NREGA job card or Aadhaar letter, as complete KYC document for
opening of an account (ref. paragraph 2.4 (f) of the Master circular dated July 1,
2010) the bank account so opened will also be subjected to all conditions and
limitations prescribed for small account in the Notification.

Nomination Facility:

Banking Companies (Nomination) Rules 1985 permits banks to pay dues to nominees in the
event of death of depositor(s) without asking for succession certificate or verifying claims of
legal heirs. This simplifies settlement. Of course, as Trustee the nominee is accountable to
legal heirs.

 Nomination facility available for bank deposits, safe deposit lockers, safe custody
articles.
 There can be only one Nominee for a deposit account whether held singly or jointly.
 There can be two nominees for a jointly held locker.
 A person legally empowered to operate a minor's account can file a nomination on
behalf of the minor.

Deposit Insurance cover:

 All commercial banks including branches of foreign banks functioning in India, local
area banks and regional rural banks are insured by the DICGC.
 Cooperative Banks: Generally all State, Central and Primary cooperative banks, also
called urban cooperative banks,
 The DICGC insures all deposits such as savings, fixed, current, recurring, etc. deposits
 Each depositor in a bank is insured upto a maximum of 1,00,000 (Rupees One Lakh)
for both principal and interest amount held by him in the same right and same
capacity as on the date of liquidation/cancellation of bank's licence or the date on
which the scheme of amalgamation/merger/reconstruction comes into force.
 If you have deposits with more than one bank, deposit insurance coverage limit is
applied separately to the deposits in each bank.