RBI directs RRBs and Cooperative Banks to revamp their savings bank accounts

The banking regulator RBI last week asked all the cooperative banks and regional rural banks (RRB) to waive off the minimum balance requirement on all their savings account and in-effect convert them to 'basic saving accounts'.

"The existing basic banking 'no-frills' accounts should be converted to Basic Savings Bank Deposit Account," read the RBI notifications to the banks. It further added that a single customer can only have one such account and will have to close any savings bank account within a month.

Basic savings account would come with services like deposit and withdrawal of cash at branch and ATM and also credit of money through e-payment modes. The account would be entitled to a maximum of four withdrawals per month including ATM transactions.

RBI had introduced 'no-frills' savings accounts in 2005 to promote financial inclusion and provide banking services to the poor and financially excluded. Such accounts were slated to be maintained with very low or zero minimum balance.