Under the new rules of the Reserve Bank of India, banks will have to inform customers about the deactivation of their accounts through SMS, letter or email.
The Reserve Bank of India has told banks that they cannot impose penalty on accounts which are inactive i.e. in which no transaction has taken place for more than two years, for not maintaining the minimum balance. It also said that banks cannot classify accounts created for receiving scholarship money or direct benefit transfer as inoperative, even if they have not been used for more than two years.
Banks will have to inform customers
According to the report, the direction given to banks is a part of the RBI’s new circular on inoperative accounts and also part of its efforts to reduce the level of unclaimed bank deposits. According to the news of Times of India, the new rules have come into effect from April 1. Under the new rules, banks will have to inform customers about deactivation of their accounts through SMS, letter or email. Banks have also been asked to contact the person who introduced the account holder or the account holder’s nominees if the owner of a dormant account does not respond.
No fee to activate inactive accounts
As per rules, banks are not allowed to levy penal charges for non-maintenance of minimum balance in any account designated as inoperative account. No charges will be levied for activating inactive accounts. According to RBI, unclaimed deposits increased by 28% to Rs 42,272 crore by the end of March 2023, from Rs 32,934 crore a year ago.
Any balance in deposit accounts which have not been operated for 10 years or more is required to be transferred by banks to the Depositors and Education Awareness Fund set up by the RBI.
