Bank accounts are essential financial tools, which provide the facility of safe keeping of money transactions and other banking services. People are free to open any number of bank accounts to manage their finances properly. However, certain limits have been placed on the number and type of bank accounts.
savings bank accounts
Indian citizens can open multiple savings bank accounts with different banks. There is no limit on the number of savings accounts a person can have. People can choose banks for themselves on the basis of banking services, interest rates or convenience.
Basic Savings Bank Deposit Account
Reserve Bank of India (RBI) has introduced Basic Savings Bank Deposit Account to ensure access to banking services for all. Indian citizens can open only one BSBDA per bank, and these accounts have certain limitations, such as restricted maximum balance and transaction limits.
People who are in business can open current accounts to manage their financial transactions. There is no specific limit on the number of current accounts a person can maintain. However, the bank may assess the need for multiple current accounts depending on the requirements.
Consequences of exceeding bank account limit
If a person has bank accounts in excess of the prescribed limit, regulatory action can be initiated against him. RBI and other authorities may scrutinize the banking activities of the person and take appropriate measures to ensure compliance. This may result in penalties, fines or other disciplinary action.
Opening a bank account and exceeding the prescribed limit may raise concerns regarding tax evasion or money laundering. Tax laws are strict to monitor financial transactions and prevent illegal activities. If suspicion arises due to multiple bank accounts, the account holder may face scrutiny, accounts audit and possible legal consequences.
problems with financial management
Managing multiple bank accounts can be cumbersome and complicated, especially when it comes to tracking transactions, maintaining sufficient funds and meeting regulatory requirements. Exceeding prescribed limits can lead to confusion and financial mis-management making it challenging to maintain accurate records and effectively meet banking obligations.
negative impact on credit
Multiple bank accounts and associated financial mis-management can have a negative impact on an individual’s credit. Banks and financial institutions consider various factors including the banking history of an individual while evaluating credit for loans and other financial services.
Irresponsible management of multiple accounts may hinder access to credit facilities in future or result in higher interest rates.