RBI Releases Guidelines for Banks on Inoperative Accounts and Unclaimed Deposits

In a significant move, the Reserve Bank of India (RBI) has issued comprehensive guidelines for banks regarding the classification of accounts and deposits as inoperative and unclaimed, aiming to enhance customer protection and efficient banking practices.

The guidelines include a periodic review of such accounts and deposits, measures to prevent fraud, a robust grievance redressal mechanism, and steps to trace customers or legal heirs for account reactivation, claims settlement, or closure.

This initiative follows the RBI’s “100 Days 100 Pays” campaign launched in June last year. The campaign requires banks to trace and settle the top 100 unclaimed deposits in every district. The deadline for the scheme, initially set for September 8, has now been extended to April 1, 2024.
Under the new guidelines, banks must conduct an annual review of accounts without customer transactions for over a year. Additionally, zero-balance accounts will not be classified as ‘inoperative’ if inactive for more than two years. This adjustment addresses challenges faced by governments in crediting funds to such accounts.

Furthermore, the RBI mandates that reactivated accounts undergo concurrent audits, with transactions monitored for at least six months. Balances in savings or current accounts inactive for a decade, along with unclaimed deposits, are transferred to the Depositor Education and Awareness (DEA) fund maintained by the RBI.

These guidelines reflect the RBI’s commitment to ensuring the proper handling of inoperative accounts and unclaimed deposits, with constant monitoring to track progress made by banks in this regard. The move aims to streamline banking processes and protect the interests of customers across the country.