Basic Savings Bank Deposit Account - Complex Design, Faulty Implementation
This work is a culmination of in-length correspondence with RBI and select banks, regarding how banks had been handling the RBI mandated savings product, the Basic Savings Bank Deposit Account (BSBDA). With about one-third of the savings bank accounts opened (or currently in place) being BSBDAs, the banks have done a remarkable job, at least on paper, for opening BSBDAs. Nevertheless, there are certain issues, both technical and commercial in nature, which are not taking forward this zero balance savings account product in the right perspective. Based on the queries posed to RBI and four of the study banks and inputs received therefrom, this report has been prepared to facilitate the regulator and the banks come out with meaningful corrections, while taking forward BSBDAs. In the report, (i) we provide the regulatory backdrop in the form of a historical perspective of BSBDA and thereafter understand BSBDA through communications with RBI and banks, (ii) we present findings of a designed survey of bank branches conducted to study the awareness towards BSBDA by bank staff and ease of opening such accounts by citizens, (iii) we study the banks’ websites where we look into service charge for BSBDA and disclosures made by them in this regard, (iv) we discuss the service charge regulations and supervisory requirement for ensuring compliance by banks, and (v) we suggest a simple and implementable design changes in BSBDAs.
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