The Reserve Bank of India (RBI) on 1st January 2024 released comprehensive guidelines on the measures to be put in place by banks while classifying accounts and deposits as inoperative accounts and unclaimed deposits.
- The revised instructions will come into effect from April 1, 2024.
- The new guidelines were issued after RBI launched the “100 Days 100 Pays” campaign in June 2023, under which banks must trace and settle the top 100 unclaimed deposits of every bank in every district.
Key points
- The RBI has asked banks not to classify zero balance accounts, which are opened for the beneficiaries of government schemes like direct benefit transfer (CBS), even if there is no activity in the account for two years.
- The central and state governments had been expressing difficulty in crediting cheques/direct benefit transfer/electronic benefit transfer/scholarship amounts in these accounts as they are also classified as inoperative due to non-operation for two years.
- An account that has not been operated for two years is classified as inoperative.
- The RBI said customers have to submit KYC documents afresh for reactivating the account.
- Deposits maintained in any account, which have not been operated upon for 10 years or more, or any amount remaining unclaimed for 10 years or more, are required to be transferred by banks to the ‘Depositor Education and Awareness Fund Scheme’. The fund is maintained by the RBI.
- For the purpose of classifying an account as ‘inoperative’, only customer-induced transactions and not bank-induced transactions should be considered.
- It is expected to reduce the quantum of unclaimed deposits in the banking system and return such deposits to their rightful owners/claimants.
