Do You Have Dormant Bank Account? Here's How To Reactivate It

In absence of any transactions in an account for more than a year, the banks are supposed to inform customers "in writing" and try to ascertain the reason for it.

Are you aware that a bank account can become dormant if you have not used it for two years? Yes, and once an account is dormant, you cannot avail the services associated with it. In absence of any response from customers over emails, calls, and letters, banks consider such account inoperative after a year.

The policy ensures that the money lying in a bank account is not misused. That's why the regulator has asked banks to "play a more proactive role in finding the whereabouts of the account holders whose accounts have remained inoperative".

Connecting With Customers

Under the Reserve Bank of India (RBI) mandate, banks have to conduct an annual review of accounts that have seen no operations, no credit or debit transactions other than crediting of periodic interest or debiting of service charges.

In absence of any transactions in an account for more than a year, the banks are supposed to inform customers "in writing" and try to ascertain the reason for it. Also, in case of bank account change due to shifting, banks are supposed to check details of the new account to be able to shift money from the inoperative bank account.

In case, the customer responds, the account is marked as operative and gives the customer a year's time to start operating it. "However, in case the account holder still does not operate the same during the extended period, banks should classify the same as inoperative account after the expiry of the extended period," according to RBI's circular.

How To Regularise Dormant Account

You need to visit the branch of the bank and give an application to activate the dormant account. The dormant bank account can be activated the next business day or may take more time depending on the internal processes and risk category of the depositor.

Banks can reactivate customers' bank account based on the risk category of the account holder. Under the norms, customers can operate dormant accounts on receiving know your customer (KYC) documents or may need more due diligence. A bank can ask the customer for verification of signature besides taking the KYC documents.

There are no charges for the activation of inoperative accounts. In fact, interest on savings bank accounts has to be credited regularly whether the account is operative or not.

Also, note that if a fixed deposit matures and proceeds are unpaid, the amount left unclaimed with the bank will continue to get the savings bank rate of interest.