RBI issues revised instructions concerning inoperative accounts, unclaimed deposits in banks

The Reserve Bank of India (RBI) on Monday issued revised instructions with regards to inoperative accounts /unclaimed deposits in banks to help the account holders or the legal claimants to get their monies through dedicated and more intense efforts by the banking organisations to trace the beneficiaries by various methods.

As per the new instructions the bank are required to contact the holder(s) of the inoperative account/ unclaimed deposit through letters, email or SMS (if the email and mobile number are registered with the bank). “The email/ SMS shall be sent on a quarterly basis.” In case the whereabouts of the holder(s) of the inoperative account/ unclaimed deposit are not traceable, the banks shall contact the introducer, if any, who had introduced the account holder to the bank at the time of opening of the account.

The banks shall also contact the nominee, if registered, for tracing the customer,” the central bank said. “The banks shall undertake special drives periodically to find out the whereabouts of the customers, their nominees or legal heirs in respect of inoperative accounts / unclaimed deposits,” the RBI said.

Banks are required to credit interest on savings accounts on a regular basis irrespective of the fact that the account is in operation or not. And banks are not allowed 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 RBI said “As a measure to assist the account holders and with a view to consolidating and rationalising the extant instructions on inoperative accounts, a review was carried out in consultation with all stakeholders.

Based on the review, it has been decided to covering various aspects of classifying accounts and deposits as inoperative accounts and unclaimed deposits, as the case may be,” the RBI said in a circular. These include periodic review of such accounts and deposits, measures to prevent fraud in such accounts/deposits, grievance redressal mechanism for expeditious resolution of complaints, steps to be taken for tracing the customers of inoperative accounts/ unclaimed deposits including their nominees/ legal heirs for re activation of accounts, settlement of claims or closure and the process to be followed by them, it added.

“These instructions are expected to complement the ongoing efforts and initiatives taken by banks and the Reserve Bank, to reduce the quantum of unclaimed deposits in the banking system and return such deposits to their rightful owners/ claimants,” it further said. As per the current instructions, the credit balance in any deposit account maintained with banks, which have not been operated upon for ten years or more, or any amount remaining unclaimed for ten years or more, are required to be transferred by banks to the Depositor Education and Awareness” (DEA) Fund which is maintained by the RBI This revised circular is applicable to all Commercial Banks (including RRBs) and all Cooperative Banks and this will come into effect from April 1.

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