The Reserve Bank of India (RBI) has issued revised guidelines to classify and manage inoperative accounts and unclaimed deposits in banks.
RBI said that new guidelines have been issued to ensure that the unclaimed amount deposited in banks reaches the rightful claimants, which will be applicable from April 1.
According to the central bank, banks are required to transfer the amount lying in any of their deposit accounts for 10 years or more to the Depositor Education and Awareness Fund of RBI.
New guidelines regarding unclaimed deposits:
- Banks should annually review those accounts where the customer has not done any transaction for a year or more.
- If this happens, banks will have to inform the account holders i.e. customers in writing about this.
- If the customer files a reply giving reasons for inactivity, banks will have to keep the account in active category for one more year. That means they cannot declare the account inactive for the next one year.
- If the concerned customer does not respond to the written communication, the Bank should immediately verify the address/whereabouts of the account holder or nominee.
- It is important to separate inactive accounts to reduce the risks of fraud.
- Transactions in reactivated accounts should be monitored regularly for at least 6 months. This work should be the responsibility of higher officials.
- Banks should provide the facility to update their KYC for activating inactive accounts in all branches including video KYC.
- Accounts frozen on the orders of ED, Court, Tribunals and other legal agencies can be reactivated only after the KYC process.
- After submitting the KYC documents, the bank will be required to inform the account holders about the status of their account.
- Banks cannot charge fine for not maintaining minimum balance in any inactive account.
- To protect against fraud, banks should not allow any debit transaction in any inoperative account unless the customer plays a role in it.
- It has been said in the guidelines that banks can also consider imposing a cooling-off period on reactivation along with restrictions on the number and amount of transactions.
If you have accounts related to government schemes
Banks will have to set aside inoperative accounts used for DBT (Direct Benefit Transfer) under government schemes. And for this the limit will not be of 1 year but of 2 years. These accounts will be called ‘inactive’ only if there is no operation for more than 2 years.
Banks should make customers aware: RBI
The central bank said that banks should regularly run public awareness and financial literacy campaigns to make them aware about activating dormant accounts and unclaimed deposits. RBI said, banks will have to ensure that customer data related to inactive accounts is not leaked.
