The RBI rolled out new directives regarding inoperative accounts and barred banks from penalising or imposing charges on accounts inactive (no transaction) for over two years. "Banks are not permitted to levy penal charges for non-maintenance of minimum balances in any account that is classified as an inoperative account. No charges shall be levied for activation of inoperative accounts," the rules said. Further, interest on savings accounts shall be credited regularly irrespective of the fact that the account is in operation or not.
These guidelines will come into effect from April 1, 2024.
Further, accounts set up for receiving scholarships or direct benefit transfers from the government won't be labelled inoperative even after two years of inactivity. The RBI asked banks to categorise these accounts differently in their CBS systems to not put them in inoperative status due to dormancy.
"The banks open zero balance accounts for beneficiaries of Central/State government schemes and for students who receive scholarships. Central and State governments have been expressing difficulty in crediting cheques/Direct Benefit Transfers/ Electronic Benefit transfers/ scholarship amounts in these accounts as they are also classified as inoperative due to non-operation for two years. The banks shall, based on the purpose of opening the account, segregate the aforementioned accounts in their CBS, so that the stipulation of ‘inoperative’ account does not apply to these accounts due to their non-operation for more than two years," the directive said.
The directive aims to minimize unclaimed deposits, which had surged 28 per cent to Rs 42,272 crore by March 2023 from a year ago. Notably, any balance in deposit accounts, that have not been operated upon for 10 years or more, is required to be transferred by banks to Depositor and Education Awareness Fund maintained by RBI.
"These instructions are expected to complement the ongoing efforts and initiatives taken by banks and RBI to reduce the quantum of unclaimed deposits in the banking system and return such deposits to their rightful owners/claimants," RBI said in its circular.
Under the new rules, banks have to inform customers through SMS, letters or email of their accounts turning inoperative. Banks have also been asked to reach out to the person who introduced the account holder or the account holder's nominees in case the owner of an inoperative account does not respond.
According to the latest rules, banks must conduct a yearly check on accounts with no customer transactions for over a year. If term deposits are not explicitly renewed, banks should review them, especially if customers haven't withdrawn the money after maturity or transferred it to their savings or current accounts, to avoid the deposits becoming unclaimed.