The Reserve Bank of India has put forward draft instructions for Basic Savings Bank Deposit (BSBD) Accounts with the goal of making banking more inclusive and better suited to a digital era. These proposals are open for public comment and signal a clear shift toward putting customers first.
Why Savings Accounts matter
Basic Savings Bank Deposit Accounts exist to guarantee that every person can access essential banking services without cost. As India embraces digital payments and online banking more broadly, the RBI is updating the rules to make sure low cost and no frills banking keeps pace with that change.
Key Aspects of Draft BSBD Guidelines
i) minimum facilities must be free: Every bank will be required to offer a BSBD account that lets customers make unlimited deposits by cash, cheque or electronic means. Each account must come with an ATM cum debit card with no annual charge. Account holders must be able to get a cheque book with at least 25 leaves per year. Internet banking and mobile banking access must be available. Customers should receive either a physical passbook or a monthly statement by post or email. Banks will allow four free withdrawals each month and those free withdrawal counts will not include digital payments.
ii) no balance or entry fees: Banks are not allowed to insist on any minimum balance or an initial deposit to open a BSBD account.
iii) digital payments are promoted: Transactions made through digital rails such as UPI, NEFT, RTGS and IMPS will be excluded from the monthly free withdrawal limit, which encourages customers to adopt cashless payment methods.
iv) customer choice must be respected: Banks can offer ATM cards and internet banking at the time an account is opened but only if the customer asks for them. The bank cannot force these services on the customer as a mandatory condition of opening the account.
v) conversion rules and limits on holding multiple accounts: If a customer with an existing savings account requests it, that account must be converted to a BSBD account within seven days. Each person is allowed to hold only one BSBD account across all banks. A customer holding a BSBD account at a bank cannot hold any other savings account at the same bank, although term deposits remain permitted.
How and when this will take effect
Once the RBI finalizes these directions they will come into effect immediately. Banks must be fully compliant by March 31 2026.
Regulatory clean up
The draft brings together and replaces a number of earlier circulars that date back to 2005, simplifying the set of rules that govern BSBD accounts.
Expected effects on financial inclusion
The RBI intends these rules to lower the practical and financial barriers to opening and using bank accounts, to speed up the shift to digital payments among low income and rural customers, and to make account terms clearer for consumers.
What banks need to do next
Banks are expected to make the features of BSBD accounts public and to proactively explain to customers how these accounts differ from other savings products. The RBI is seeking feedback on this draft before it becomes final.
RBI’s Draft ‘Basic Savings Bank Deposit (BSBD) Account Directions, 2025 dated 01/10/2025