RBI replaces ‘no-frills’ with basic savings a/c

The Reserve Bank of India, on Friday, asked banks to drop the ‘no-frills’ tag from the basic saving accounts as the nomenclature has become a stigma.

It has asked banks to provide the zero balance facility in the basic banking accounts along with ATM-cum-debit cards without any extra charge.

The central bank had introduced ‘no-frills’ accounts in 2005 to provide basic banking facilities to poor and promote financial inclusion.

The Reserve Bank has asked banks to convert the existing ‘no-frills’ accounts into ‘Basic savings bank deposit accounts’

While there will be no limit on the number of deposits that can be made in a month, basic savings bank deposit account holders will be allowed a maximum of four withdrawals in a month, including through ATMs.

“This account shall not have the requirement of any minimum balance... Further, no charge will be levied for non-operation/activation of in-operative ‘Basic savings bank deposit account,’’ the RBI said.

As per the modified guidelines, the services available in these accounts will include receipt of money through electronic payment channels or by cheques issued by government agencies.

This would also help those covered under the welfare schemes such as MNREGA in receiving payments. (PTI)