Did Not Operate Bank Account for 10 Years? Here’s RBI’s New Rule You Should Know About
The Reserve Bank of India (RBI) has introduced revised guidelines for inoperative bank accounts and unclaimed deposits, making it easier for customers to reactivate dormant accounts. The new rules, titled “Inoperative Accounts/Unclaimed Deposits in Banks – Revised Instructions (Amendment) 2025,” came into immediate effect on June 12, 2025.
What Happens to Inoperative Accounts?
Currently, if a bank account remains inactive for 10 years or has unclaimed deposits for the same duration, banks transfer the funds to the Depositor Education and Awareness (DEA) Fund, maintained by the RBI. This fund is used to promote depositor interests and related initiatives.
However this is going to change now. RBI has instructed banks to provide accessible opportunities to holders of inoperative accounts to reactivate their accounts and gain back access to blocked funds.
Key Changes Under the New RBI Guidelines
- KYC Updation at All Branches – Banks must now provide KYC (Know Your Customer) updation facilities for reactivating inoperative accounts and unclaimed deposits at all branches, including non-home branches.
- Video Identification (V-CIP) Allowed – Customers can complete KYC through Video Customer Identification Process (V-CIP), ensuring remote verification.
- Use of Business Correspondents – Banks may also engage authorized Business Correspondents to assist in reactivating dormant accounts.
The RBI circular states:
“A bank shall make available the facility of updation of KYC for activation of inoperative accounts and unclaimed deposits at all branches (including non-home branches). Further, a bank shall endeavour to provide the facility of updation of KYC in such accounts and deposits through Video-Customer Identification Process (V-CIP).”
This move aims to simplify account reactivation, reducing the burden on customers who may have lost access to their funds due to inactivity.
Why This Matters
Millions of accounts become inoperative each year, locking away funds unnecessarily. With these changes, the RBI ensures faster, more convenient reactivation, benefiting depositors who may have forgotten about old accounts.
