When does RBI classify a bank account as dormant? Here’s what rules for reactivation and unclaimed money say
That old savings or current account you stopped using may still hold your money. Under Reserve Bank of India (RBI) rules, an account can become inoperative after more than two years without customer-induced transactions, but that does not mean the balance is lost.
RBI has laid down procedures for customers to reactivate inoperative accounts and claim unclaimed deposits. Here’s what happens when a bank account remains unused and how you can recover your money.
When does a bank account become dormant?
Under RBI rules, a savings or current account is classified as inoperative when there have been no customer-induced transactions for more than two years. Transactions initiated by the customer or a third party on the customer’s behalf are considered, while bank charges and interest credited by the bank are generally not treated as customer-induced transactions.
Importantly, an inoperative account is not the same as a lost account. The balance remains associated with the account holder and can be accessed after completing the required process.
How can you reactivate an inoperative account?
RBI instructions require banks to provide facilities for KYC updation to activate inoperative accounts and unclaimed deposits at all branches, including non-home branches. Banks are also required to endeavour to offer KYC updation through Video-Customer Identification Process (V-CIP), where available. Authorised Business Correspondents can also facilitate KYC updation in eligible cases.
RBI’s financial-awareness guidance says banks should activate an inoperative account within three working days after completion of the required KYC and due-diligence process.
So, a customer can approach the bank concerned, complete the required KYC formalities and request activation of the account.
What happens after 10 years?
There is another important deadline for bank account holders to know.
Deposits that remain unclaimed for 10 years are transferred by banks to the Reserve Bank of India’s Depositor Education and Awareness (DEA) Fund. However, this does not mean the depositor loses the money.
The rightful account holder or beneficiary can still claim the unclaimed amount from the concerned bank by following its prescribed claim process. The bank then pays the eligible claimant and seeks reimbursement from the DEA Fund.
How to find a forgotten bank account?
The RBI’s UDGAM portal allows customers to search for unclaimed deposits and accounts across participating banks from a single platform.
Users can register and search using details such as the account holder’s name and bank information, along with identifiers including PAN, driving licence number, voter ID, passport number or date of birth. Even where these details are unavailable, the account holder’s address can be used in the search.
However, UDGAM does not itself settle the claim. It only helps locate the unclaimed deposit and provides information about the bank’s claim or settlement process. The actual claim has to be made through the respective bank.
Is there a charge for reactivating a dormant account?
RBI rules state that banks should not charge customers for activating an inoperative account.
This means customers should not assume that an old, unused account is permanently inaccessible simply because it has been classified as dormant or its deposit has moved to the DEA Fund.
