By The Reserve Bank of India (RBI) has updated its guidelines on how banks should manage inoperative accounts and unclaimed deposits. These changes, effective from April 1, 2024, aim to consolidate existing instructions and enhance support for account holders. Key points include:
1. Inoperative Accounts: Accounts not used for ten years, or any funds left unclaimed for the same period, must be transferred to the RBI’s Depositor Education and Awareness (DEA) Fund.
2. Guidelines Overview: The RBI reviewed its policies with various stakeholders, leading to comprehensive guidelines. These cover how accounts are classified as inoperative or unclaimed, regular reviews, fraud prevention measures, grievance handling, and procedures for reactivating accounts or claiming funds. The goal is to decrease the amount of unclaimed deposits and return these funds to rightful owners.
3. Definitions and Reviews: – Inoperative Account**: An account with no customer-initiated transactions for over two years.
– Banks must annually review accounts with no activity for over a year and take steps to notify account holders, aiming to prevent deposits from becoming unclaimed. – Accounts specifically opened for scholarships or government direct benefits won’t be classified as inoperative due to inactivity.
4. Operational Guidelines for Activation:
– Reactivation of inoperative accounts can be done at any bank branch or through video-customer identification, following KYC guidelines. – Banks should ensure activation requires authorization by another official, with system logs kept for audit purposes.
5.Interest and Charges:
– Interest will continue to be paid on savings accounts, whether they are active or not. – No penalties will be charged for not maintaining a minimum balance in an inoperative account, and no fees for account activation.
6. Transparency:
– Banks will display details of unclaimed deposits on their websites, updated monthly. A search feature will help the public find any unclaimed deposits they might have. – Banks are instructed not to allow debits from inoperative accounts without customer-initiated activation, potentially including a cooling-off period with transaction restrictions similar to those for new accounts.
7. Public Awareness:
– Information on how to activate inoperative accounts or claim unclaimed deposits will be available both online and in bank branches, alongside the necessary forms and documentation. – Banks are encouraged to run awareness campaigns to educate the public on these processes.
These guidelines are part of the RBI’s efforts to protect consumers and ensure that funds in inoperative accounts or unclaimed deposits are managed responsibly and returned to their rightful owners wherever possible.
