Big relief proposed by RBI for account holders in activating an inoperative bank account or claiming unclaimed deposits
The
Reserve Bank of India
on May 23, 2025 has proposed a significant change for banking customers who are struggling with getting their in-operative bank account active again. This new change in rules for accessing inoperative accounts/ unclaimed deposits in a bank is at draft stage and not yet active as the
RBI
is inviting public comments about the same. If you wish to give your inputs about the same then do it on or before June 6, 2025.
This rule changes relates to how a customer can access the in-operative bank account or the unclaimed money in a bank account. The RBI proposed that banks will have to launch a KYC updation facility at all of their branches including the home branch and also enable video KYC if so, requested by a customer. Once the KYC is done, the in-operative bank account or unclaimed money can be accessed again.
Read below to know what the RBI said about the proposed rule change for inoperative accounts/ unclaimed deposits in a bank.
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What did RBI say?
The RBI said in a notification dated May 23, 2025, the following:
A bank shall make available the facility of updation of KYC for activation of inoperative accounts/ unclaimed deposits at all branches (including non-home branches) and through Video-Customer Identification Process (V-CIP) if requested by an account holder, subject to the facility of V-CIP being provided by the bank. The V-CIP related instructions under Master Direction - Know Your Customer (KYC) Direction, 2016 dated February 25, 2016 (as updated from time to time) shall be adhered to by the bank.
Additionally, an authorised Business Correspondent of the bank may be utilized for
activation of inoperative accounts
as prescribed in paragraph 38(a)(iia) of the above Master Direction.
What happens if you don't make in-operative bank accounts active again or don't claim the unclaimed funds in a bank account?
If you don't claim back the unclaimed funds or make the in-operative accounts active again and this has happened for ten years or more, then the funds in these accounts will be transferred to the RBI's Depositor Education and Awareness (DEA) fund. Just like in case of shares which remain unclaimed for seven or more years, it is transferred to the Investor Education and Protection Funds (IEPF), in banking parlance it is transferred to DEA funds.
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In the notification, the RBI said: 'As per instructions, issued vide circular DOR.SOG(LEG).REC/64/ 09.08.024/2023- 24 dated January 1, 2024 (hereinafter called the extant instructions), the credit balance in any deposit account maintained with banks, which have not been operated upon for ten years or more, or any amount remaining unclaimed for ten years or more, as mentioned in paragraph 3(iii) of the 'Depositor Education and Awareness' (DEA) Fund Scheme, 2014, are required to be transferred by banks to DEA Fund maintained by the Reserve Bank of India.'
How to share your comments about the new proposed change in unclaimed deposit, in-operative bank accounts?
The RBI said in a press release dated May 23, 2025, 'Reserve Bank has released today the draft circular on Inoperative Accounts/ Unclaimed Deposits in Banks – Revised Instructions (Amendment) 2025 which modifies the aforementioned instructions.
The comments on the draft circular are invited from the public/ stakeholders till June 6, 2025. The comments/ feedback may be submitted through the link under the 'Connect 2 Regulate' Section available on the Reserve Bank's website or may alternatively be forwarded to
The Chief General Manager
Business Conduct Group
Department of Regulation, Central Office
Reserve Bank of India, 12/13th Floor
Shahid Bhagat Singh Marg
Fort Mumbai – 400 001
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