A report recently said that
Basic Savings Bank Deposit Accounts
(
BSBDA
) are being converted into a regular savings accounts for those have exceeded their withdrawal limits.

The report prepared by Ashish Das, an IIT Bombay professor, says, "design anomalies" are prompting bankers to overcharge BSBDA customers in violation of the Reserve Bank of India's (RBI) extant regulations. "The moment a 5th debit transaction is done by the customer in a month, these banks without explicit and voluntary consent of customers are unilaterally converting the BSBDA into a regular savings account, requiring high minimum balance and associated service charges," the report said.
Although the rules allow banks to convert BSBDA into a regular account or charge a penalty if the withdrawal limits are not met, the objective of the banking regulator for inclusion banking may be hit.
All banks are mandated by RBI to offer such a facility to those looking to open a bank account. However, be aware of the restrictions in the account to avoid financial dejection.
A BSBDA scores over a regular savings account primarily because it does not require a minimum balance (MAB) to be maintained. Not maintaining the required MAB in one's regular savings account, which varies from bank to bank, could attract a penalty, while in BSBDA there is no such compulsion regarding account balances.
Although the BSBDA is a zero-balance savings account, it comes with restrictions.


Restrictions
Although there is no limit on the number of deposits that can be made in a month, the maximum withdrawals per month is limited to just four. This includes withdrawals from ATMs and other modes like RTGS, NEFT, clearing, branch cash withdrawal, online transfer, standing instructions, equated monthly instalments (EMIs) etc. It is, however, left to the banks to decide whether they want to offer additional withdrawals free of cost or to charge a fee.
What do you get in a BSBDAYou don't have to maintain a minimum average monthly balance and no minimum amount is required for opening the account. The interest rate will be the same as that on the regular savings account. RBI rules do not put restrictions on deposits or withdrawals from this type of account, neither does it have any transaction limits.
You, as an account holder, will get the ATM-cum-debit card and the passbook facility. All regular features including deposit and withdrawal of cash at bank branches as well as ATMs, cheque book facility (payable at par or multi-city) and online funds transfer will be available in the account. These facilities will be provided without any charges. BSBDA account holders can open fixed deposits and recurring deposits.
To know more about BSBDA and who should opt for a BSBDA, click here. 

Here are the watch outs

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