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RBI makes it easier to access, reactivate dormant accounts, deposits
The Reserve Bank of India (RBI) has issued new guidelines to reactivate bank accounts and access unclaimed deposits, giving relief to customers and heirs trying to claim forgotten assets.
Banks must offer more accessible options for updating Know Your Customer (KYC) information needed to reactivate a dormant account, according to the new guidelines.
What are inoperative accounts, unclaimed deposits
RBI norms say that if a savings or current account hasn't been operated for 10 years or more, or if any deposit remains unclaimed for a similar period, it is considered 'inoperative.' The funds in such accounts are transferred to the Depositor Education and Awareness (DEA) Fund maintained by the RBI.
Claiming money from these accounts involved a physical visit to the home branch and complicated paperwork.
What's new in the updated rules?
The RBI, in a circular dated June 12, has amended its earlier guidelines from January 2024. Here's what has changed:
KYC update at any branch: Customers can now update their KYC not just at the home branch, but at any branch of their bank.
Video KYC allowed: Banks have been directed to facilitate Video-based Customer Identification Process (V-CIP) for reactivating inoperative accounts. This enables customers to verify their identity remotely through a video call.
Business correspondents: Banks may also use the services of their authorised Business Correspondents to help customers complete the KYC process. This could be particularly useful in rural and remote areas where physical branches are limited.
Why does this matter
If you or your family members have forgotten about an old deposit or know of a relative's account lying dormant, these new rules could help you access those funds more easily.
The convenience of video KYC and branch flexibility will reduce the burden of paperwork and travel, key for senior citizens, NRIs, and heirs claiming deceased family members' funds.
What to do next?
Check with your bank if you suspect an old account might have gone dormant.
Contact customer service or visit any nearby branch to start the KYC process.
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