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Foreign banks can open zero-balance accounts

 

Foreign banks can open zero-balance accounts

Withdrawals from basic savings bank deposit accounts are capped at four a month, including withdrawals via ATMs

The Reserve Bank of India (RBI) on Wednesday said foreign banks with branches in India could open zero-balance accounts. In a list of frequently asked questions issued by the central bank, it said basic savings bank deposits account (BSBDA) guidelines were applicable to “all scheduled commercial banks in India, including foreign banks having branches in India”.

Under the BSBDA scheme, any individual, including those from weaker sections of society, can open zero-balance accounts in any bank.

Withdrawals from such accounts, which don’t have a mandatory minimum balance and a cap on the deposits, are capped at four a month, including withdrawals through automated teller machines (ATMs). Banks are required to provide ATM card facilities to such account holders. “Banks are advised not to impose restrictions such as age and income criteria of the individual for opening BSBDA,” RBI said.

Free services under the BSBDA scheme include deposit and withdrawal of cash, receipt/credit of money through electronic payment channels or deposit/collection of cheques at bank branches, as well as ATM cards.

A BSBDA holder wouldn’t be eligible to open any other savings account in the bank concerned. If a customer has any other existing savings account in that bank, he/she would have to close it within 30 days from the date of opening a BSBDA.

BSBDA is part of RBI’s efforts towards financial inclusion. There are 43 foreign banks, with about 330 branches, operating in India.

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