Revised RBI Guidelines on Inoperative Accounts and Unclaimed Deposits

The Reserve Bank of India (RBI) has issued revised guidelines regarding the classification of accounts and deposits as inoperative accounts and unclaimed deposits by banks.

Here’s a breakdown

What Constitutes an Inoperative Account?

  • An account becomes inoperative if there are no ‘customer induced transactions’ for over two years.
  • Customer induced transactions include financial transactions initiated by the account holder, non-financial transactions, or KYC updates.
  • Approximately Rs 1-1.30 lakh crore is estimated to be lying in inoperative bank accounts.

Defining Unclaimed Deposits

  • Balances in savings or current accounts not operated for 10 years or term deposits not claimed within 10 years from maturity are classified as unclaimed deposits.
  • The government reported unclaimed deposits of Rs 42,270 crore as of March 2023.

Revised Guidelines by RBI

  • Banks must conduct an annual review for accounts with no customer induced transactions for over a year.
  • For term deposits, banks need to review accounts if proceeds are not withdrawn after maturity to prevent them from becoming unclaimed.
  • Communication to account holders should be done via letters, emails, or SMS about inactivity and the need for KYC updates.

Classification Criteria for Inoperative Accounts

  • Only customer induced transactions are considered for classifying an account as inoperative.
  • Bank induced transactions such as charges and fees are not included.
  • Accounts opened for government schemes or scholarships should be segregated in the CBS to exempt them from inactivity stipulations.

Reactivation Process

  • KYC updates can reactivate inoperative accounts and unclaimed deposits.
  • Banks must provide KYC updation facilities at all branches and through V-CIP if requested.
  • No charges should be levied for the activation of inoperative accounts.

Penalty and Interest Policies

  • Banks cannot impose penal charges for non-maintenance of minimum balances in inoperative accounts.
  • Interest on savings accounts should be credited regularly regardless of the account’s operational status.

Piyush Shukla

Recent Posts

UN Chief António Guterres Launches Global Methane Action Plan Amid Escalating Climate Crisis

United Nations Secretary-General António Guterres has issued the strong warning about the growing dangers of…

2 hours ago

Rajasthan Forms 5-Member Panel to Draft Uniform Civil Code

The State government of Rajasthan has constituted a five-member committee to prepare a draft law…

2 hours ago

India’s First Made-in-India C295 Aircraft Set for IAF Delivery in September

India's first Made In India C295 transport aircraft is set to be delivered to the…

3 hours ago

BRICS Heads of Space Agencies Gather in India to Strengthen Global Space Cooperation

On 23rd to 24th June, 2026 in Bengaluru India hosting the BRICS Heads of Space…

3 hours ago

India Ranks 13th in QS World Future Skills Index 2027

India has secured the 13th position in the QS World Future Skills Index of 2027…

4 hours ago

Largest Economies in the World 2026: Top 10 Countries by Nominal GDP and Where India Stands

The latest International Monetary Fund (IMF) World Economic Outlook Report which released in the April…

4 hours ago