MUMBAI: The Reserve Bank has issued new guidelines to activate inactive bank accounts and also to help get back unclaimed deposits.
The new updated guidelines, which go into effect immediately, provide more flexibility by allowing KYC updates via any bank branch, video-based verification, and with the assistance of business correspondents.
In a notification issued Thursday, the RBI said, “a bank shall make available the facility of updation of KYC for activation of inoperative accounts and unclaimed deposits at all branches (including non-home branches). Further, a bank shall endeavour to provide the facility of KYC updation in such accounts and deposits through video-customer identification process (V-CIP).
Additionally, the services of an authorised bank BCs may be utilised for the activation of inoperative accounts.
Bank accounts that haven’t been used or operated for 10 years or more are considered inoperative. Similarly, deposits that remain unclaimed for a decade also fall under this category and as of FY24, this amounted to around Rs 74,000 crore of which Rs 8,000 are with SBI alone.
As per existing rules, the balance in such accounts is required to be transferred by banks to the Depositor Education and Awareness (DEA) Fund, maintained by the RBI.
The new rules on inoperative accounts include the KYC updation at any branch: Banks must now provide the facility to update KYC documents for inoperative accounts and unclaimed deposits at all branches, including non-home branches. This means customers no longer need to travel to the branch where the account was originally opened.