Summary of this article
RBI classifies accounts as inoperative after two years without customer transactions.
Customers can reactivate accounts by completing KYC verification through their bank.
Unclaimed balances after 10 years move to RBI’s DEA Fund.
Customers who have not used their bank accounts for an extended period may need to complete certain steps before they can start using them again. Through its RBI Kehta Hai financial awareness campaign, the Reserve Bank of India (RBI) has issued an advisory on when a bank account becomes inoperative and how customers can reactivate the same.
What is an Inoperative Bank Account
A bank account becomes inoperative when there are no customer-initiated transactions for more than two years, according to the RBI.
Such transactions include activities carried out by the accountholder, such as cash deposits, withdrawals, fund transfers and other banking transactions initiated through available channels. If these transactions are not carried out for a particular period, the account is classified as inoperative. An inoperative account can create inconvenience for customers when they need to access banking services.
How to Reactivate an Inoperative Bank Account
Customers can reactivate an inoperative account by contacting their bank and completing the required know-your-customer (KYC) process. They can update their KYC details at any branch of the bank or through video KYC. Using the account for regular transactions can help keep it active whereas access to services is restored after the bank completes the required verification.
What Happens if a Bank Account Remains Inactive
If the amount stays unclaimed for more than 10 years, the bank transfers the balance to the Depositor Education and Awareness (DEA) Fund maintained by the RBI. Customers or their legal heirs can still claim the amount by approaching the concerned bank and completing the required process.
The RBI maintains the DEA Fund to keep balances from bank accounts that have remained unclaimed for 10 years or more. The fund is used for activities which relate to depositor awareness and education. Also, customers should track their bank account activity and make sure their KYC details are updated to avoid issues at the time of using banking services. Regularly using the account and staying aware of banking requirements can help customers manage their accounts smoothly.
