Basic Savings Bank Deposit Account (BSBDA)

What is the definition of Basic Savings Bank Deposit Account (BSBDA)? 

BSBDA allows you to bank with a zero minimum balance requirement. All the existing ‘No-frills’ accounts opened by the banks are now converted into BSBDA in compliance with the guidelines issued on August 22, 2012 by the Reserve Bank of India (RBI).

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2. Limits in BSBDA (Accounts with introduction/ Small Accounts): 

• Aggregate of all credits in a financial year does not exceed Rs.1.00 lac

• The aggregate of all withdrawals and transfers in a month does not exceed Rs.10,000/-

• Balance at any point of time does not exceed Rs.50,000/-.

• The aim of introducing BSBDA is part of the efforts of RBI for furthering financial inclusion objectives.

3. Can an Individual have any number of 'Basic Savings Bank Deposit Account' in one bank?

No. An individual is eligible to have only one 'Basic Savings Bank Deposit Account' in one bank.

4. Whether a 'Basic Savings Bank Deposit Account' holder can have any other savings bank account in that bank ?

Holders of 'Basic Savings Bank Deposit Account' will not be eligible for opening any other savings bank account in that bank. If a customer has any other existing savings bank account in that bank, he / she will be required to close it within 30 days from the date of opening a 'Basic Savings Bank Deposit Account'.

5. Can an individual have other deposit accounts where one holds 'Basic Savings Bank Deposit Account’?

Yes. One can have Term/Fixed Deposit, Recurring Deposit etc., accounts in the bank where one holds 'Basic Savings Bank Deposit Account'.

6. Whether the ‘Basic Savings Bank Deposit Account’ can be opened by only certain types of individuals like poor and weaker sections of the population?

No. The 'Basic Savings Bank Deposit Account' should be considered as a normal banking service available to all customers, through branches.

7. Whether there are any restrictions like age, income, amount etc criteria for opening BSBDA by banks for individuals?

No. Banks are advised not to impose restrictions like age and income criteria of the individual for opening BSBDA.

8. Is the 'Basic Savings Bank Deposit Account' a part of furthering the Financial Inclusion objectives of banks?

The aim of introducing 'Basic Savings Bank Deposit Account' is very much part of the efforts of RBI for furthering Financial Inclusion objectives. All the accounts opened earlier as 'no-frills' account should be renamed as BSBDA 

9. What are KYC norms applicable to BSBDA accounts? Are there any relaxations in KYC norms for BSBDAs?

The 'Basic Savings Bank Deposit Account' would be subject to provisions of PML Act and Rules and RBI instructions on Know Your Customer (KYC) / Anti-Money Laundering (AML) for opening of bank accounts issued from time to time. BSBDA can also be opened with simplified KYC norms. However, if BSBDA is opened on the basis of Simplified KYC, the accounts would additionally be treated as “BSBDA-Small  Account” 

10. Can I have a ‘Small Account’ in ABC Bank . Can I have additionally a 'Basic Savings Bank Deposit Account’?

No, the BSBDA customer cannot have any other savings bank account in the same bank. If 'Basic Savings Bank Deposit Account’ is opened on the basis of simplified KYC norms, the account would additionally be treated as a 'Small Account' and would be subject to conditions stipulated on 'KYC norms / AML Measures/ Combating of Financing of Terrorism (CFT) / Obligation of banks under PMLA, 2002'.

11. What are the conditions stipulated for accounts which are additionally to be treated as ‘BSBDA-Small Account’?

As notified  in Govt of India notification dated December 16, 2010, BSBDA-Small Accounts would be subject to the following conditions:

1. Total credits in such accounts should not exceed one lakh rupees in a year.
2. Maximum balance in the account should not exceed fifty thousand rupees at any time
3. The total of debits by way of cash withdrawals and transfers will not exceed ten thousand rupees in a month
4. Remittances from abroad can not be credited to Small Accounts without completing normal KYC formalities
5. Small accounts are valid for a period of 12 months initially which may be extended by another 12 months if the person provides proof of having applied for an Officially Valid Document.
6. Small Accounts can only be opened at CBS linked branches of banks or at such branches where it is possible to manually monitor the fulfilment of the conditions.

12. What kinds of services are available free in the 'Basic Savings Bank Deposit Account’?

The services available free in the 'Basic Savings Bank Deposit Account’ will include deposit and withdrawal of cash; receipt / credit of money through electronic payment channels or by means of deposit / collection of cheques at bank branches as well as ATMs.

13. of any initial minimum deposit Is there requirement while opening a BSBDA as per the circular dated August 17, 2012?

There is no requirement for any initial deposit for opening a BSBDA.

14. Whether banks are free to offer more facilities than those prescribed for ‘Basic Savings Bank Deposit Account’?

Yes. However, the decision to allow services beyond the minimum prescribed has been left to the discretion of the banks who can either offer additional services free of charge or evolve requirements including pricing structure for additional value-added services on a reasonable and transparent basis, to be applied in a non-discriminatory manner with prior intimation to the customers. Banks are required to put in place a reasonable pricing structure for value added services or prescribe minimum balance requirements which should be displayed prominently and also informed to the customers at the time of account opening. Offering such additional facilities should be non - discretionary, non-discriminatory and transparent to all ‘Basic Savings Bank Deposit Account’ customers. However, such accounts enjoying additional facilities will not be treated as BSBDAs.

15. If BSBDA customers have more than 4 withdrawals and request for cheque book at additional cost, will it cease to be a BSBDA?

Yes. Please refer to response to the Query No. 14. However, if the bank does not levy any additional charges and offers more facilities free than those prescribed under BDBDA a/cs without minimum balance then such a/cs can be classified as BSBDA.

16. Whether the existing facility available in a normal saving bank account of five free withdrawals in a month in other banks ATMs as per IBA (DPSS) instructions will hold good for BSBDA?

No. In BSBDA, banks are required to provide free of charge minimum four withdrawals, through ATMs and other mode including RTGS/NEFT/Clearing/Branch cash withdrawal/transfer/internet debits/standing instructions/EMI etc It is left to the banks to either offer free or charge for additional withdrawal/s. However, in case the banks decide to charge for the additional withdrawal, the pricing structure may be put in place by banks on a reasonable, non-discriminatory and transparent manner.

17. Are the banks free to levy Annual ATM Debit Card charges?

Banks should offer the ATM Debit Cards free of charge and no Annual fee should be levied on such Cards.

18. Whether Balance enquiry in ATMs also should be counted within the four withdrawals permitted under BSBDA?

Balance enquiry through ATMs should not be counted in the four withdrawals allowed free of charge at ATMs.

19. If a customer of BSBDA opts not to have ATM Debit card, should the bank compel the customer to accept the ATM debit card ?

ATM debit cards may be offered at the time of opening BSBDA and issued if the customer requests for the same in writing. Banks need not  insist that  a customer accepts ATM debit card.

20. What about customers who are illiterate or old who may not be in a position to safe keep and use the ATM debit card and PIN associated with it?

Banks while opening the BSBDA should educate such a customers about the ATM Debit Card, ATM PIN and risk associated with it. However, if a customer chooses not to have an  ATM Debit Card,  banks need not compel such customer to accept ATM Debit Card. If, however, customer opts to have an ATM Debit card, banks should provide the same to BSBDA holders through safe delivery channels by adopting the same procedure which they have been adopting for delivery of ATM Debit card and PIN to their other customers.

21. Whether Passbooks are also to be offered free to BSBDA holders?

Yes. BSBDA holders should be offered passbook facility free of charge 

22. If a customer opens a BSBDA but does not close his existing Savings Bank Account within 30 days, are banks then free to close such savings bank accounts?

While opening the BSBDA customers’ consent in writing be obtained that his existing non-BSBDA Savings Banks accounts will be closed after 30 days of opening BSBDA and banks are free to close such accounts after 30 days.

23. In certain accounts to which disbursements under MGNREGA are made weekly, the number of withdrawals may be more than four in a month of five weeks. In such cases, can banks permit five withdrawals?

In BSBDA, banks are required to provide free of charge minimum four withdrawals, including through ATM and other mode. Beyond four withdrawals, it is left to discretion of the banks to either offer free or charge for additional withdrawal/s. However pricing structure may be put in place by banks on a reasonable, non-discretionary, non-discriminatory and transparent manner.

25. In  terms of RBI circular   if “payable at par” / “multi-city” cheques are issued to BSBDA customers based on their request, can banks prescribe minimum balance requirements?

BSBDA does not envisage cheque book facility in the minimum facilities that should be provided  to BSBDA customers. They are free to extend any additional facility including cheque book facility free of charge (in which case the account remains BSBDA) or charge for the additional facilities (in which case the account is not BSBDA).

26. What is the time frame available to banks for converting “No-Frills” Account as Basic Savings Bank Deposit Account? What is the time frame available to banks for issuing ATM Cards to all the existing Basic Savings Bank Deposit Account holders?

All the existing “No-Frill” accounts may be treated as BSBDA accounts from the date of the circular i.e., August 17, 2012 and banks may offer the prescribed facilities as per the circular such as issuing ATM card etc., to the existing ‘No-Frill’ account holders as and when the customer approaches the bank. However, customers opening new accounts after the issue of our circular should be provided prescribed facilities immediately on opening of the account.

27. Whether the normal saving bank account can be converted into BSBDA at the request of customer?

Yes. Such customers should give their consent in writing and they should be informed of the features and extent of services available in BSBDAs.

Under the Basic Savings Bank Deposit Account (BSBDA) scheme of Reserve Bank of India:

• The Basic Savings Bank Deposit Account should be considered as a normal banking service available to all customers (Any individual, including poor or those from weaker section of the society), through branches.

• BSBDA guidelines are applicable to “all scheduled commercial banks in India, including foreign banks having branches in India”.

• The services available in the account will include deposit and withdrawal of cash at bank branch as well as Free ATMs-cum-Debit Card; receipt/credit of money through electronic payment channels or by means of deposit/collection of cheques drawn by Central/State Government agencies and departments.

• There will be no limit on the number of deposits that can be made in a month, account holders will be allowed a maximum of four withdrawals in a month, including ATM withdrawals.

• No charge will be levied for non-operation/activation of in-operative ‘Basic Savings Bank Deposit Account’.

• Holders of ‘Basic Savings Bank Deposit Account’ will not be eligible for opening any other savings bank deposit account in that bank. If a customer has any other existing savings bank deposit account in that bank, he/she will be required to close it within 30 days from the date of opening a ‘Basic Savings Bank Deposit Account’.

• One can have Term/Fixed Deposit, Recurring Deposit etc., accounts in the bank where one holds ‘Basic Savings Bank Deposit Account’.

• The ‘Basic Savings Bank Deposit Account’ would be subject to RBI instructions on Know Your Customer (KYC) / Anti-Money Laundering (AML) for opening of bank accounts issued from time to time. If such account is opened on the basis of simplified KYC norms, the account would additionally be treated as a ‘Small Account’.

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Important Formulae - Quantitative Aptitude

ALGEBRA :

1.      Sum of first n natural numbers = n(n+1)/2

2.      Sum of the squares of first n natural numbers = n(n+1)(2n+1)/6

3.      Sum of the cubes of first n natural numbers = [n(n+1)/2]²

4.      Sum of first n natural odd numbers = n²

5.      Average = (Sum of items)/Number of items

Arithmetic Progression (A.P.):

An A.P. is of the form a, a+d, a+2d, a+3d, ...

where a is called the 'first term' and d is called the 'common difference'

1.      nth term of an A.P. tn = a + (n-1)d

2.      Sum of the first n terms of an A.P. Sn = n/2[2a+(n-1)d] or Sn = n/2(first term + last term)

Geometrical Progression (G.P.):

A G.P. is of the form a, ar, ar², ar³, ...

where a is called the 'first term' and r is called the 'common ratio'.

1.      nth term of a G.P. t_n = ar^n-1

2.      Sum of the first n terms in a G.P. Sn = a|1-rⁿ|/|1-r|

Permutations and Combinations :

1.      nPr = n!/(n-r)!

2.      nPn = n!

3.      nP1 = n

1.      nCr = n!/(r! (n-r)!)

2.      nC1 = n

3.      nC0 = 1 = nCn

4.      nCr = nCn-r

5.      nCr = nPr/r!

Number of diagonals in a geometric figure of n sides = nC2-n

Tests of Divisibility :

1.      A number is divisible by 2 if it is an even number.

2.      A number is divisible by 3 if the sum of the digits is divisible by 3.

3.      A number is divisible by 4 if the number formed by the last two digits is divisible by 4.

4.      A number is divisible by 5 if the units digit is either 5 or 0.

5.      A number is divisible by 6 if the number is divisible by both 2 and 3.

6.      A number is divisible by 8 if the number formed by the last three digits is divisible by 8.

7.      A number is divisible by 9 if the sum of the digits is divisible by 9.

8.      A number is divisible by 10 if the units digit is 0.

9.      A number is divisible by 11 if the difference of the sum of its digits at odd places and the sum of its digits at even places, is divisible by 11.

H.C.F and L.C.M :

H.C.F stands for Highest Common Factor. The other names for H.C.F are Greatest Common Divisor (G.C.D) and Greatest Common Measure (G.C.M).

The H.C.F. of two or more numbers is the greatest number that divides each one of them exactly.

The least number which is exactly divisible by each one of the given numbers is called their L.C.M.

Two numbers are said to be co-prime if their H.C.F. is 1.

H.C.F. of fractions = H.C.F. of numerators/L.C.M of denominators

L.C.M. of fractions = G.C.D. of numerators/H.C.F of denominators

Product of two numbers = Product of their H.C.F. and L.C.M.

PERCENTAGES :

1.      If A is R% more than B, then B is less than A by R / (100+R) * 100

2.      If A is R% less than B, then B is more than A by R / (100-R) * 100

3.      If the price of a commodity increases by R%, then reduction in consumption, not to increase the expenditure is : R/(100+R)*100

4.      If the price of a commodity decreases by R%, then the increase in consumption, not to decrease the expenditure is : R/(100-R)*100

PROFIT & LOSS :

1.      Gain = Selling Price(S.P.) - Cost Price(C.P)

2.      Loss = C.P. - S.P.

3.      Gain % = Gain * 100 / C.P.

4.      Loss % = Loss * 100 / C.P.

5.      S.P. = (100+Gain%)/100*C.P.

6.      S.P. = (100-Loss%)/100*C.P.

Short cut Methods:

1.      By selling an article for Rs. X, a man loses l%. At what price should he sell it to gain y%?       (or)

A man lost l% by selling an article for Rs. X. What percent shall he gain or lose by selling it for Rs. Y?

(100 – loss%) : 1^st S.P. = (100 + gain%) : 2^nd S.P.

2.      A man sold two articles for Rs. X each. On one he gains y% while on the other he loses y%. How much does he gain or lose in the whole transaction?

In such a question, there is always a lose. The selling price is immaterial.

Formula for loss %

3.      A discount dealer professes to sell his goods at cost price but uses a weight of 960 gms. For a kg weight. Find his gain percent.

 

Formula: Gain % =

RATIO& PROPORTIONS:

1.      The ratio a : b represents a fraction a/b. a is called antecedent and b is called consequent.

2.      The equality of two different ratios is called proportion.

3.      If a : b = c : d then a, b, c, d are in proportion. This is represented by a : b :: c : d.

4.      In a : b = c : d, then we have  a* d = b * c.

5.      If a/b = c/d then ( a + b ) / ( a – b  ) = ( d + c ) / ( d – c ).

TIME & WORK :

1.      If A can do a piece of work in n days, then A's 1 day's work = 1/n

2.      If A and B work together for n days, then (A+B)'s 1 days's work = 1/n

3.      If A is twice as good workman as B, then ratio of work done by A and B = 2:1

PIPES & CISTERNS :

1.      If a pipe can fill a tank in x hours, then part of tank filled in one hour = 1/x

2.      If a pipe can empty a full tank in y hours, then part emptied in one hour = 1/y

3.      If a pipe can fill a tank in x hours, and another pipe can empty the full tank in y hours, then on opening both the pipes,

the net part filled in 1 hour = (1/x-1/y)  if y>x

the net part emptied in 1 hour = (1/y-1/x) if x>y

TIME & DISTANCE :

1.      Distance = Speed * Time

2.      1 km/hr = 5/18 m/sec

3.      1 m/sec = 18/5 km/hr

4.      Suppose a man covers a certain distance at x kmph and an equal distance at y kmph. Then, the average speed during the whole journey is 2xy/(x+y) kmph.

PROBLEMS ON TRAINS :

1.      Time taken by a train x metres long in passing a signal post or a pole or a standing man is equal to the time taken by the train to cover x metres.

2.      Time taken by a train x metres long in passing a stationary object of length y metres is equal to the time taken by the train to cover x+y metres.

3.      Suppose two trains are moving in the same direction at u kmph and v kmph such that u>v, then their relative speed = u-v kmph.

4.      If two trains of length x km and y km are moving in the same direction at u kmph and v kmph, where u>v, then time taken by the faster train to cross the slower train = (x+y)/(u-v) hours.

5.      Suppose two trains are moving in opposite directions at u kmph and v kmph. Then, their relative speed = (u+v) kmph.

6.      If two trains of length x km and y km are moving in the opposite directions at u kmph and v kmph, then time taken by the trains to cross each other = (x+y)/(u+v)hours.

7.      If two trains start at the same time from two points A and B towards each other and after crossing they take a and b hours in reaching B and A respectively, then A's speed : B's speed = (√b : √

SIMPLE & COMPOUND INTERESTS :

Let P be the principal, R be the interest rate percent per annum, and N be the time period.

1.      Simple Interest = (P*N*R)/100

2.      Compound Interest = P(1 + R/100)^N – P

3.      Amount = Principal + Interest

LOGORITHMS :

If a^m = x , then m = log_ax.

Properties :

1.      log _xx = 1

2.      log _x1 = 0

3.      log _a(xy) = log _ax + log _ay

4.      log _a(x/y) = log _ax - log _ay

5.      log _ax = 1/log _xa

6.      log _a(x^p) = p(log _ax)

7.      log _ax = log _bx/log _ba

Note : Logarithms for base 1 does not exist.

AREA & PERIMETER :

Shape                          Area                            Perimeter

Circle                           ∏ (Radius)²                 2∏(Radius)

Square                         (side)²                          4(side)

Rectangle                    length*breadth                        2(length+breadth)

1.      Area of a triangle = 1/2*Base*Height or

2.      Area of a triangle = √ (s(s-(s-b)(s-c)) where a,b,c are the lengths of the sides and s = (a+b+c)/2

3.      Area of a parallelogram = Base * Height

4.      Area of a rhombus = 1/2(Product of diagonals)

5.      Area of a trapezium = 1/2(Sum of parallel sides)(distance between the parallel sides)

6.      Area of a quadrilateral = 1/2(diagonal)(Sum of sides)

7.      Area of a regular hexagon = 6(√3/4)(side)²  

8.      Area of a ring = ∏(R²-r²) where R and r are the outer and inner radii of the ring.

VOLUME & SURFACE AREA :

Cube :

Let a be the length of each edge. Then,

1.      Volume of the cube = a³ cubic units

2.      Surface Area = 6a² square units

3.      Diagonal = √ 3 a units

Cuboid :

Let l be the length, b be the breadth and h be the height of a cuboid. Then

1.      Volume = lbh cu units

2.      Surface Area = 2(lb+bh+lh) sq units

3.      Diagonal = √ (l²+b²+h²)

Cylinder :

Let radius of the base be r and height of the cylinder be h. Then,

1.      Volume = ∏r²h cu units

2.      Curved Surface Area = 2∏rh sq units

3.      Total Surface Area = 2∏rh + 2∏r² sq units

Cone :

Let r be the radius of base,  h be the height, and l be the slant height of the cone. Then,

1.      l² = h² + r²

2.      Volume = 1/3(∏r²h) cu units

3.      Curved Surface Area = ∏rl sq units

4.      Total Surface Area = ∏rl + ∏r² sq units

Sphere :

Let r be the radius of the sphere. Then,

1.      Volume = (4/3)∏r³ cu units

2.      Surface Area = 4∏r² sq units

Hemi-sphere :

Let r be the radius of the hemi-sphere. Then,

1.      Volume = (2/3)∏r³ cu units

2.      Curved Surface Area = 2∏r² sq units

3.      Total Surface Area = 3∏r² sq units

Prism : 

      1.   Volume = (Area of base)(Height)

Banking Term: Biflation

Banking Term: Biflation

The simultaneous existence of inflation and deflation in an economy. Biflation, while seemingly a paradox, results when inflation in commodity assets coexists with deflation in debt-based assets. Biflation typically occurs when a fragile economic recovery causes the central bank to open up the monetary spigots in a bid to stimulate the economy. This may result in higher prices for certain assets such as energy and precious metals, and declining prices for leveraged assets such as real estate and automobiles.

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