RBI Asks Banks to Replace ‘No Frills Accounts’ With Savings Accounts

The Reserve bank of India (RBI) has instructed the banks to stop using the tag – ‘no frills’ accounts and replace it with the basic savings accounts.

RBI asked banks to provide zero balance facility in basic savings accounts and provide customers, ATM and debit cards at no cost. Further, no charge will be levied for non-operation/activation of in-operative savings accounts.

RBI asked banks to limit the number of withdrawals to four per month and there will be no limit on the number of deposits made in a month. RBI said that, it has decided to modify the guidelines of opening of basic banking ‘no-frills accounts’.

As per the modified guidelines by RBI, these accounts provide receipt of money through electronic payment channels or by cheques issued by government agencies.