RBI Updates BSBD Account Rules Under RBC Norms

Press Release: 2025-2026/1625, Dated: 04.12.2025

1. Introduction

The Reserve Bank of India (RBI) has issued fresh Amendment Directions revising the rules governing Basic Savings Bank Deposit (BSBD) Accounts in alignment with its Responsible Business Conduct (RBC) framework. These changes aim to strengthen customer protection, ensure fair treatment of account holders, and enhance transparency in service offerings by banks.

2. Understanding BSBD Accounts and the Need for Amendments

BSBD accounts—also known as no-frills accounts—were introduced to promote financial inclusion by offering essential banking services at minimal or zero cost. However, RBI identified inconsistencies in how banks implemented charges, additional services, and customer communication. Under the Responsible Business Conduct norms, the central bank has now refined the regulatory expectations to ensure that BSBD accounts remain simple, affordable, and customer-centric.

3. Key Amendments Announced by RBI

The updated Directions clarify permissible services, applicable charges, and transparency requirements for BSBD accounts. RBI has reinforced that banks cannot impose unfair fees or bundle services without explicit customer consent. Banks must clearly disclose all terms, maintain uniformity in service delivery, and avoid practices that may mislead or disadvantage financially vulnerable customers. The amendments also emphasise grievance redressal mechanisms to ensure timely resolution of customer complaints.

4. Implications for Banks and Customers

For banks, the amendments necessitate a review of their existing BSBD product structures, internal processes, and customer communication practices. They must align their offerings with the revised RBC norms to avoid non-compliance. For customers, especially those from low-income and rural backgrounds, the updated framework strengthens safeguards, reduces the risk of hidden charges, and ensures access to essential banking services without financial burden.

5. Conclusion

By issuing these Amendment Directions, RBI has reinforced its commitment to fostering ethical and customer-friendly banking practices. The revised BSBD account regulations, framed under the Responsible Business Conduct norms, aim to ensure fairness, transparency, and accessibility for millions of account holders. These reforms are expected to enhance trust in the banking system and drive India closer to its financial inclusion goals.

Click Here To Read The Full Press Release