If your account has been dormant for over two years, it is crucial to take immediate action to reactivate it.
Starting January 1, 2025, the Reserve Bank of India (RBI) will implement a series of crucial changes, affecting lakhs of bank accounts across the country. Are you at risk of losing access to your bank account? It’s essential to understand these changes and take action before it’s too late. Here’s everything you need to know about the upcoming RBI guidelines.
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The RBI’s decision to close certain types of bank accounts stems from its objective to enhance the safety, transparency, and efficiency of banking transactions. By streamlining the system, the apex bank aims to curb fraudulent activities, particularly bank account hacking, and promote digitalisation and modernisation within the sector. This new rule is designed to minimise risks, address shortcomings in banking operations, and provide better services to customers while protecting their interests.
As of January 1, 2025, three specific types of bank accounts will face closure under these new guidelines. But which accounts are under the radar? Let’s take a closer look.
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1. Dormant Accounts
A dormant account is one where there have been no transactions for a continuous period of two years or more. These accounts are particularly vulnerable to misuse by hackers, who often target inactive accounts for fraudulent activities. To safeguard customers and the banking system, the RBI has decided to close such accounts.
2. Inactive Accounts
Inactive accounts are those with no transaction activity over a specified period (typically 12 months or more). These accounts will also be closed as part of the RBI’s efforts to enhance account security and reduce the risk of fraudulent behaviour. If your account falls into this category, it is essential to either reactivate it or face potential closure.
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3. Zero Balance Accounts
Accounts that maintain a zero balance for an extended period will also be subject to closure. The RBI’s objective is to prevent the misuse of such accounts, minimise financial risks, and encourage customers to maintain active relationships with their banks. Additionally, this measure is intended to strengthen Know Your Customer (KYC) norms and ensure that all customer information is up to date and accurate.
Precautionary Measures for Customers
If your account has been dormant for over two years, it is crucial to take immediate action to reactivate it. The first step is to complete the KYC (Know Your Customer) process, if not already done. You may need to visit your bank or update your details online. To avoid your account being flagged as inactive, ensure that your KYC details are updated regularly. This includes verifying your identity and address with the bank whenever required.
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Banks often require a minimum balance to be maintained in an account. Be sure to check your bank’s specific guidelines and maintain the required balance to prevent your account from being considered inactive. Also, while offline banking options are still available, prioritising digital banking channels not only offers convenience but also aligns with the RBI’s push towards a more modern banking system.
