It was almost impossible to open a bank account without a valid proof of address. But due to the Pradhan Mantri Jan Dhan Yojana, it became easier for the economically backward sections of the society to open Jan Dhan bank accounts. However, due to lack of proper documents, many Indians still face similar problems every day and expect a simple documentation process. To make the account opening process easier, SBI has taken the KYC norms a step further. Under this, SBI is now offering customers the facility to open savings account (also known as small account) with zero balance without submitting KYC documents. Individuals above 18 years of age can avail this facility and open a small bank account. Due to relaxation in KYC policy, the bank has issued some guidelines for operating these accounts. The main objective of this scheme is financial inclusion of poor sections of the society. Information related to this is being given through this article.
Who can open Small Bank Account?
State Bank of India (SBI) is providing opportunity to migrant workers and economically backward sections of society to open an account with zero balance without submitting KYC documents. This account can be kept active for one year and it can be converted into a regular savings account within one year by presenting KYC or proof of identity. Persons above 18 years of age are eligible to open an account with zero balance under single name or joint names.
What documents will be required to open a small account?
To open a zero balance account, you will have to visit the nearest SBI branch and contact the employees of the bank. You can open a bank account by giving a declaration form for the residential address and submitting the application and self-attested photo. The customer has to put his thumb on the application in the presence of a bank officer. After the process is complete, a small bank account will be opened in the name of the customer.
Rules for operation of small bank account
- The new rules state that the balance in these small accounts should not exceed Rs 50 thousand. Also, withdrawals and transactions of not more than Rs 10 thousand per month should be made through these accounts.
- A limit has been specified for dealing with these accounts. Account-holders cannot transact more than this limit. The account holder can transact a total of one lakh rupees per year. If the account holder makes the transaction up to this limit, further transactions will be allowed only when the customer submits his KYC documents or proof of address.
- Through this account you can withdraw money up to 4 times per month. This will include transactions done through the ATMs of the same bank and other banks, as well as other methods such as NEFT, RTGS, cash withdrawal from branch, transfer etc.
- The bank’s guidelines state that money cannot be deposited in this account from a foreign account, until all the customer’s documents are deposited.
- Account holders can directly contact the bank branch to convert small bank accounts into regular savings accounts. To do this, the customer has to manually submit all KYC documents. After verifying the documents, the account will be converted into a regular savings account.
How long can this account remain operational?
It is mandatory to keep this type of account operational for one year. Within this one year, the account holder has to submit KYC documents with the bank. If the account holder submits the KYC documents, the account can continue for up to 12 months. If the account holder is unable to follow the guidelines and does not submit KYC details within 12 months of opening a small account, the account will not get an extension for another 12 months. Also, if the account holder is unable to submit the documents within 24 months of opening of the small account, the bank will not allow further transactions from this account. In this situation the bank will only allow the transactions required to close the account.
Benefits of this account
- Generally, the account holder is not required to pay any fee for maintaining minimum balance and other facilities in this type of account.
- The bank distributes the RuPay ATM-cum-Debit Card to the account holder free of charge.
- The account holder does not have to pay the annual maintenance fee.
- Transactions done through these accounts through NEFT or RTGS are completely free.
- There is no charge even for the closure of this account.