November 11, 2005
All Scheduled Commercial Banks
Please refer to Paragraph 96 of the Mid-term
Review of Annual Policy Statement for the year 2005-06.
2. The Annual Policy Statement of April 2005,
while recognising the concerns in regard to the banking practices that tend
to exclude rather than attract vast sections of population, urged banks to review
their existing practices to align them with the objective of financial inclusion.
In many banks, the requirement of minimum balance and charges levied, although
accompanied by a number of free facilities, deter a sizeable section of population
from opening / maintaining bank accounts.
3. In this context, with a view to achieving
the objective of greater financial inclusion, all banks are advised to make
available a basic banking 'no-frills' account either with 'nil' or very
low minimum balances as well as charges that would make such accounts accessible
to vast sections of population. The nature and number of transactions in such
accounts could be restricted, but made known to the customer in advance in a
transparent manner. All banks are advised to give wide publicity to the facility
of such a 'no-frills' account including on their web sites indicating the facilities
and charges in a transparent manner.
4. The number of such deposit accounts opened
by the bank may be reported to us on a quarterly basis.
5. Immediate action may be initiated and compliance
reported to us within one month.
6. Please acknowledge receipt.
Chief General Manager