Some of us have multiple savings accounts in our names but are unable to ensure that they remain open. Keeping track of different savings accounts is difficult. It worsens managerial errors and confusion. You may risk losing money if you don’t maintain your bank accounts. Your savings or current account is considered inactive if it has been more than a year since any transaction occurred, with the exception of interest being credited to the bank or service fees being deducted. The account is deemed dormant or inoperative after two years.
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The depositor is unable to use the account’s associated services after it becomes dormant. If a customer ignores the bank’s emails, calls, or letters for a year, the bank may declare the account inactive. The policy makes sure that funds in a bank account are not exploited. In order to locate the account holders whose accounts have remained inactive, the regulator has advised banks to take a more proactive approach.
Procedure to reactivate a dormant savings account:
Customers who want to activate a dormant account must go to their local bank branch and submit an application. Depending on internal procedures and the depositor’s risk category, a bank may activate a dormant account the following business day or it may take longer.
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In accordance with the risk category of the account holder, the Reserve Bank of India (RBI) has permitted banks to normalise customers’ bank accounts. Therefore, upon receiving KYC (know your customer) paperwork, banks may let consumers operate dormant accounts or may request additional due diligence. Along with requesting the KYC documents, a bank may also request the customer’s signature for confirmation. Notably, for this procedure, banks won’t charge any additional amount.
The Reserve Bank of India (RBI) has instructed banks to monitor accounts that have not had any transactions. Banks are required to notify consumers “in writing” and make an effort to find out why any transactions haven’t been done in their accounts for more than a year. If clients have changed bank accounts, banks are required to obtain information about the new account where the funds from the inactive bank account can be moved.
