RBI’s propaganda on basic saving account falling flat
Shrikrishna Kachave 26 June 2018
Every day for the past two months, even existing customers of Axis Bank have received a promotional mailer captioned - "Get Your Zero Balance AXIS ASAP Savings Account in 3 Easy Steps”. For the first time in its history, the Reserve Bank of India’s (RBI) has also woken up to the need to promote financial safety and options. Among the messages it has sent out to our mobile phones is one promoting the Basic Savings Bank Deposit Accounts (BSBDA), which has no minimum balance requirement and no additional cost. The RBI is also promoting this through emails and advertisement in newspapers and on websites.
Does this mean that banks are now bending backwards to promote basic, no-frills accounts where they cannot lop off a punitive charge for not maintaining average minimum balance? Has banking suddenly turned more consumer friendly? Moneylife decided to investigate by visiting dozens of bank branches to try and open a BSBDA account in banks around our office at Shivaji Park at Dadar in Mumbai. The industry calls it “mystery shopping’. It should be no surprise, that the reality, but for a few notable exceptions, was vastly different for the person on the street who wants to open a basic account. 
The Basic Savings Bank Deposit Account –BSBDA- is an account, which offers basic banking facilities at almost no additional costs, says the RBI’s advertising blitzkrieg. However, the reality is startlingly different. Not many banks even offer this BSBDA facility to customers. When I posed as a potential customer and asked to open the account, some bankers feigned ignorance while other discouraged me by saying that there are no real benefits offered in such accounts. 
State Bank of India (SBI) Ranade Road, Dadar (W), Mumbai - 400028
I approached State Bank of India (SBI) for a BSBDA account. The bank officials claimed they were unaware about these accounts. Upon persisting with my request and showing them the RBI SMS, I was told that though this facility is not available with their branch, it may be available with some other branch of the Bank. This is contradictory to claims made by SBI on its website, which says BSBDA facility is available at all branches.  
Axis bank, Ranade Road, Dadar (West), Mumbai - 400028
When contacted Axis bank, which has been very aggressive in promotion of BSBDA their reply was that the account can be opened in any branch located nearest to permanent address mentioned in the ID card (Aadhaar).
In addition, only the person who had received their advertorial e-mail or SMS can open the BSBDA account after submitting details online through the link available on the messages. There is no offline facility for opening this account and one can only connect through a link in their promotional mailers. This is rather strange because the bank is sending out mass emails that are also spamming its regular account customers, including those who are its ‘priority’ customers and unlikely to be opening a BSDBA account.
Incidentally, the bank continues to send out an email every single day pushing this no-frills account. Considering the cost involved in mass emails, we wonder what the purpose of such spending. The BSBDA asks for mandatory Aadhaar details, which even the Supreme Court has not decided yet since the UIDAI judgement in pending.
Cosmos Bank, Gokhale Road, Dadar (W), Mumbai - 400028
After checking with nationalised banks, I then headed to Cosmos Bank which is multi-scheduled co-operative bank. However the employee there was too quick in replying me that no such BSDBA facility is available with the Bank. “It may be available with the nationalised banks,” he replied. 
Shamrao Vithal Co-operative Bank, Ranade Road, Dadar (W), Mumbai – 400028
In other scheduled bank, SVC Co-operative Bank, I found that BSBDA facility was available with them. However, the bank employee was very discouraging towards me from opening such account saying that BSBDA does not offer cheque book and there are several restrictions on BSBD account intimating me to open a savings account with them. 
Here is feedback from some other banks in and around Shivaji Park…
The Reserve Bank of India’s (RBI) circular of BSBDA issued on 10 August 2012 is here
Some of the salient features of BSBD Account are-
  • No requirement of maintaining a minimum average balance.
  • Facility of ATM card or ATM cum Debit card.
  • No charges for non-operation/ activation of inoperative ‘BSBDA’
An academic study by Prof Dr Ashish Das, from Department of Mathematics at Indian Institute of Technology Bombay (IITB), has found that banks are quietly converting a no-fee basic savings bank deposit account (BSBDA) to a fee-based regular account with high minimum balance requirements or charging a fee, the moment such customer carries out fifth digital payment transaction in a month. In such scenario, the account remains converted as regular saving account making the customer liable to pay for several services besides keeping minimum balance amount in her account all the time.  
According to the study, while India is working hard to bring about ease in digital transactions, State Bank of India (SBI) has debarred its 13 crore BSBDAs to carryout debit transacts more than four times in a month, even if it constitutes only digital transactions. Given that volumes of such accounts have been opened (under PMJDY) with an intention of financially including the excluded, such a scenario lacks the desired spirit of digital financial inclusion.
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