RBI Governor Sanjay Malhotra, during the monetary policy announcement on October 1, stated that the availability of digital banking facilities on Basic Savings Bank Deposit Accounts (BSBD) would significantly facilitate people.
They would be able to access banking services from the comfort of their homes. This is considered a major step towards financial inclusion in the country, i.e., bringing a large segment of the population within the scope of banking services.
The RBI has made a major announcement during the festive season. Central bank Governor Sanjay Malhotra announced on October 1 that Basic Savings Bank Deposit Account (BSBDA) holders will now also have access to digital banking services. This will benefit millions of bank account holders. Until now, digital or online banking services were only available for regular bank savings accounts. This means that now, holders of basic savings accounts will also be able to use mobile and internet banking.
What did the RBI Governor say?
RBI Governor Sanjay Malhotra , while announcing the monetary policy on October 1, said that the availability of digital banking facilities on Basic Savings Bank Deposit Account ( BSBD ) will be of great convenience to the people. They will be able to avail banking facilities from the comfort of their homes. This is being considered a big step towards financial inclusion in the country, i.e., bringing a large section of the population within the ambit of banking facilities. Currently, deposit and withdrawal facilities are available on BSBD. Money can be deposited in these accounts through electronic payment channels. Banks also issue free ATM cards to the account holders. Till now, digital banking facilities were not available on this account.
Crores of account holders will benefit
To bring a larger segment of the population within the reach of banking services, the RBI permitted banks to open BSBD accounts. This account provides basic banking services. Customers receive these services free of charge. Importantly, they do not have to maintain any minimum balance. While presenting the monetary policy, RBI Governor Malhotra stated that the process of digitization in the banking sector is ongoing. Therefore, keeping customer needs in mind, it has become necessary to provide digital services on BSBD accounts as well.
The central bank did not reduce interest rates.
The central bank announced its monetary policy on October 1st. It did not reduce the repo rate this time either. It hadn’t reduced the repo rate in August either. However, this year the RBI has reduced the repo rate by 100 basis points, or 1%. It began reducing the repo rate in February this year. It then reduced the repo rate again in April and June, bringing the repo rate down to 5.5%. It was 6.5% in January this year. The 1% reduction in the repo rate has made home and auto loans cheaper. It is estimated that the RBI may reduce the repo rate by 25 basis points in its December monetary policy.
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