RBI simplifies reactivation of dormant accounts; tightens norms to curb frauds
inoperative accounts where funds remain unclaimed.
The central bank said that activation of such accounts can simply be done by re-submission of know your customer (KYC) details across branches including non-home branches. The process can also be done through video-customer identification process (V-CIP) on account holders' request, if the facility is being provided by the bank.
Banks are not allowed to charge a fee for activation of inoperative accounts. There should also not be any penal charge for non-maintenance of minimum balances in any account that is classified as inoperative.
Banks are liable to pay interest on savings accounts irrespective of the fact that the account is in operation or not.
RBI told banks to conduct annual reviews in respect of accounts, where there are no customer induced transactions for more than a year.
«The segregation of inoperative accounts is required to be done to reduce the risk of frauds. The transactions in inoperative accounts, which have been reactivated, shall be monitored regularly, for at least six months, at higher levels without the knowledge and notice of the customers and the dealing staff,» RBI said.
The revised instructions will be effective from April 1.
