Admin Opening and maintaining a bank account is crucial for securing one’s savings, undertaking financial transactions, making investments and more. Yet, the terms and conditions applied make it a costly affair for many. Requirements like high minimum balances, locker rentals, debit card fees, commission on demand drafts/multicity cheques and GST on banking services make regular savings accounts an expensive proposition. As per an RBI research paper, the bank customers find maintaining balances difficult. This keeps many especially from lower income groups away from accessing banking which offers a secure means for parking funds.
Bank of Baroda steps in to bridge this gap for an unbanked population through its zero balance savings accounts. As the name suggests, no minimum balance needs to be maintained in these accounts. Bank of Baroda also waives off all sorts of account related charges under this offering. Let’s understand the features and benefits on offer with greater clarity.
Challenges of Regular Bank Accounts
Minimum balance requirements
Most traditional bank accounts mandate the account holder to maintain a pre-defined minimum balance every quarter/ month failing which penalty is levied. For instance, leading private and public banks require averages balance maintenance between Rs 1000-5000 for regular savings accounts in metros. In tier 1-2 cities, the quarterly requirement hovers in the Rs 500-1500 range. Remembering to keep surplus cash untouched just to comply with balance conditions is cumbersome for lower income groups like pensioners, informal market workers, homemakers etc.
High monthly service fees
In addition to balance penalties, savings accounts also levy charges for account management, debit card annual fees, cash deposit/ withdrawals beyond limit, chequebook issuance and other services. GST at 18% further contributes to the rising financial burden. Low income segments struggle with juggling these recurring costs better utilized for debt repayments, kids’ education or health contingencies.
Penalty charges for not maintaining balance
Moreover, charges kick in even if the shortfall persists for a single day in the billing cycle. According to banking norms, non-maintenance of minimum balance attracts penalty – typically between Rs 100-600 per incident. For students, low-income groups or expatriates living on tight budgets, such frequent penalties only add to difficulties and discourage banking.
Key Features of Bank of Baroda’s Zero Balance Accounts
Understanding the roadblocks posed by regular accounts, Bank of Baroda offers a lifeline through their zero balance accounts with signature benefits:
No minimum balance required to open account
This provision dramatically reduces the account opening barrier. One can start their savings/current account journey with the bank with Rs. 0 balance.
Zero monthly service fees
Unlike traditional accounts, no account keeping charges or hidden fees apply here. Usage of banking services is made completely free – unlimited ATM transactions, cash deposits & withdrawals, chequebook etc. Customers thus avoid racking up hefty bills towards monthly fees which defeat the purpose of maintaining savings.
Free ATM transactions up to a certain limit
Zero balance account holders enjoy basic ATM transactions for cash withdrawal, balance enquiry, mini statements etc. without incurring any charges up to a fair predefined limit per month. This allows basic cash needs to be met free of cost especially benefiting migrant laborers, daily wagers, and elderlies with pension payouts among others.
Chequebook facility
A 20 leaves chequebook is provided each quarter to the account holder free of cost for making various financial payments. This offers significant convenience and cost savings compared to demand drafts or money orders. Unlimited chequebook leaves can also be provided on request to suitable customers against applicable chequebook issuance charges.
Interest paid on account as per RBI rates
Any surplus balance lying idle also gets to earn returns. Interest as applicable is calculated on the available quarterly balance and credited automatically to the zero balance account. The current savings rate stands decent at 2.7% thus allowing savings to grow meaningfully.
Access to mobile and internet banking
Banking on-the-go is enabled 24×7 for customers via Bank of Baroda’s BOB World mobile application and net banking facilities. One can not only monitor account activity seamlessly but also connect bank accounts, shop online, instant pay via UPI and make utility bill payments digitally through their phone/desktop anywhere anytime.
Additional benefits like RuPay ATM-cum-debit card, SMS alerts etc. further aid in enhancing the banking experience.
Eligibility Criteria for Zero Balance Accounts
While the offerings sound appealing, one may wonder – who all stand eligible for these accounts? What are the prerequisites for opening them? Let’s understand the qualification criteria:
KYC documentation like identity and address proof required
Standard KYC or e-KYC validation applicable for opening regular savings accounts also applies for zero balance accounts. PAN/Form 60 declaration may also be sought. Upon submission of photographs and supporting documents like Aadhaar, Voter ID, Driving License etc. as residence proof, the account activation formalities kick-off.
Types of zero balance accounts offered to customers
Recognizing variety in customer needs, Bank of Baroda offers both regular zero balance savings accounts as well as current accounts to individuals and entrepreneurs alike. Special salary accounts with enhanced transaction limits are also provided for employee segments. No distinction applies in terms of location, income level or profession.
Limitations in the form of caps on transactions and maximum account balance allowed at a point as per RBI guidelines. Zero balance accounts usually have a ceiling of Rs 1 lakh imposed towards aggregate credits per year. This threshold is set considering the target customer context the offering is designed for. Those needing higher transaction volumes can graduate to premium variants.
Convenience and Accessibility Offered
What enables Bank of Baroda’s zero balance accounts to score high in terms of convenience is:
Extensive presence through 8000+ branches across India
Given the bank’s vast network spanning every city, town and rural area with a population over 10000 – those deprived of banking access get to open accounts at their nearest branch. Migrant workers in remote sites also benefit opening accounts through the bank’s business correspondent network.
Opening of accounts digitally via mobile apps or websites along with Aadhaar OTP-based authentication and paperless documentation reduces queues and time lags. Within few minutes, customers can activate accounts anytime anywhere using their handheld devices.
Availability and access to basic banking services like cash deposit, money transfer, bill payments made seamless across touchpoints using debit cards, chequebooks and latest payment interfaces (UPI, IMPS, NEFT etc.). The reliefs zero balance accounts offer make these features more inclusive.
Conclusion
Bank of Baroda’s financial inclusion initiatives through their zero balance accounts holistically solve the impediments of cost, access and convenience that fences many out from institutional banking. As evident, enrolling is made minimalistic, account maintenance totally cost-free, transactions smooth and self-serving across channels while balancing regulations. This lifts deserving low income groups to enjoy the comforts and control offered by organized finance with ample peace of mind like any other privileged account holder. Turning the tide in financially integrating rural areas, Bank of Baroda fosters social empowerment and responsibility via banking.
Also read,
Yes Bank Zero Balance Account: Your Gateway to Hassle-Free Banking
