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RBI updates guidelines on inoperative accounts and unclaimed deposits


The Reserve Bank of India (RBI) has issued new guidelines aimed at streamlining the process of handling inoperative accounts and unclaimed deposits in banks. This move is part of an ongoing effort to reduce the amount of unclaimed funds in the banking system and ensure these funds are returned to their rightful owners or claimants.

As per 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 the “Depositor Education and Awareness” (DEA) Fund Scheme, 2014, are required to be transferred by banks to DEA Fund maintained by the RBI.

As a measure to assist the account holders and with a view to consolidating and rationalising the extant instructions on inoperative accounts, a review was carried out in consultation with all stakeholders.

As per the new guidelines, banks should undertake atleast an annual review in respect of accounts, where there are no customer-induced transactions for more than a year. In cases where there is no explicit mandate to renew the term deposit, the banks should review such accounts if the customers have not withdrawn the proceeds after maturity or transferred these to their savings/current account in order to prevent such deposits from becoming unclaimed. The banks should inform the account/deposit holders in writing through letters or email or SMS (if the email and mobile number are registered with the bank) that there has been no operation in their accounts/deposits in the last one year, as the case may be. The alert messages should invariably mention that the account would become ‘inoperative’ if no operations are carried out during the next one year and, the account holder would be required to submit KYC documents afresh for reactivating the account in such case.

These and other instructions, published on the RBI website, are issued in exercise of the powers conferred by Sections 35A of the Banking Regulation Act, 1949. All commercial banks, including Regional Rural Banks (RRBs) and Co-operative Banks, are mandated to comply with these revised instructions.

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