Financial inclusivity is the need of the hour. It ensures access to affordable and need-based financial services to the traditionally excluded and underserved sections of society. Think of financial inclusion as a multi-pronged approach to poverty alleviation through technology, fiscal awareness, regulatory measures, and more.
There are several financial inclusion measures established in India. You need to know them before going for a Zero or 0 Balance Account opening online or offline.
- Lead Banking Scheme (LBS)
- Pradhan Mantri Jan Dhan Yojana (PMJDY)
- Basic Savings Bank Deposit Account (BSBDA)
Among these, the Basic Savings Bank Deposit Account is perhaps the most concrete step towards realising the objectives of poverty reduction, economic growth, and community development through financial inclusion. Let’s know how it works.
What is a Basic Savings Bank Deposit Account?
As the name says, BSBDA is a Savings Account offered by India’s private and public sector banks. The Reserve Bank of India introduced this financial tool in 2005 to extend basic financial services to the unbanked and underbanked. Basic Savings Bank Deposit Account is also a Zero Balance Savings Account.
Read Also: Why Choose a Zero Balance Account for Your Everyday Banking Needs?
How Do Zero Balance Accounts Help with Financial Inclusion?
Factors like account opening and maintenance charges, complicated application procedures, and onerous document requirements can lead to people opting out of the banking system. This is where a Zero Balance Account helps you out. It can be a remedy to the loopholes inherent in traditional Savings Accounts.
Let’s have a detailed look at the role of these accounts in financial inclusion.
The traditional accounts incur account opening and maintenance charges. In addition, they come with minimum balance limits, depending on the bank and the type of Savings Account. All these expenses make traditional accounts unaffordable for some people, which can make them stay unbanked.
However, a Zero Balance Account eliminates these unwanted expenses outright. It is openable at zero balance and stays operational at zero balance. Furthermore, 0 Balance Account opening online is free. You don’t incur any maintenance charges and have minimum balance requirements for it. With expenses eliminated, low-income individuals who were previously unbanked can now afford a Savings Account and achieve financial stability over time.
Unlike a regular Savings Account, a Zero Balance Account like a Kotak 811 digital account is easy to open, online or offline. Whether you prefer to visit the nearest branch or access the bank’s website, the process involves a few simple steps and minimal paperwork. However, specifications may vary from bank to bank. Most financial institutions today now offer the facility to open a Zero Balance Account with Video KYC. Opting for Video KYC allows you to open your digital Savings Account from the comfort of your home without any restrictions. After opening your account, you can get unrestricted spending or deposits and unlimited account validity.
A Zero Balance Account can extend banking services to those lacking the required documents or are weary of the complex application process. The major beneficiaries are students, women, and rural folks.
A Zero Balance Account is designed to offer essential financial services, such as depositing and withdrawing cash via bank branches, ATMs, and even digital means to the underbanked sections of a nation. This allows them to save money, earn interest income, carry out transactions, and even get familiar with the formal banking system. They can now receive wages, government schemes and subsidies, direct benefit transfers, and other income digitally right in their Savings Account, which was not possible earlier when basic banking services were not available to them.
Conclusion
Think of Zero Balance Accounts as a tool for financial empowerment and stability, allowing you to manage your finances and save and plan for the future. Some Zero Balance Accounts like Kotak 811 digital accounts may also offer competitive annual interest rates, allowing you to grow your savings and plan for the future.
By opening a Zero Balance Account, you can take control of your financial journey, save money, and attain your financial goals. It’s also essential to compare different options available in the market, comprehend the terms and conditions, and select the account that best fits your needs. Remember to stay informed about any policy changes, interest rates, or fees associated with your Zero Balance Account to maximise its benefits.
Read Also: Zero Balance Accounts vs. Regular Savings Accounts
