Banks to Provide Zero Balance Accounts to All
Bangalore: The Reserve Bank of India (RBI) has instructed all banks to provide basic savings or ‘no-frills’ accounts to all customers, as reported by Shruti Verma Khare of MyDigitalFC. RBI will shortly furnish details regarding related guidelines of such accounts.
This equates to customers not being under any obligation to have a minimum balance in their accounts. This feature shares some common traits of bank accounts but does not provide cheque-books and allows only limited ATM transactions. This feature was previously available only to under-banked and rural customers.
In its annual monetary policy, RBI quoted that , “Financial inclusion has been high on the agenda of the Reserve Bank of India. With a view to providing a fillip to this concept, banks were advised, in November 2005, to make available a basic banking no-frills account with either nil or very low minimum balance. The nomenclature of the account in this manner has tended to signify that these accounts are opened more with a view to indicating achievement of numerical targets under the financial inclusion plans. On a review, it has been decided to modify the guidelines on opening of basic banking no-frills accounts with a view to doing away with the stigma associated with the nomenclature and making basic banking facilities available in a more uniform manner across the banking system.”
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