RBI issues Revised Instructions on Inoperative Bank Accounts/ Unclaimed Deposits

The Reserve Bank of India(RBI) has issued revised instructions on Inoperative Bank Accounts/ Unclaimed Deposits.

According to current instructions, the credit balance in any deposit account maintained with banks that have not been operated upon for ten years or more, or any amount remaining unclaimed for ten years or more, as mentioned in paragraph 3(iii) of the “Depositor Education and Awareness” (DEA) Fund Scheme, 2014, must be transferred by banks to the Reserve Bank of India’s DEA Fund.

A review was conducted in cooperation with all stakeholders as a step to assist account holders and with the goal of consolidating and rationalising the existing instructions on inoperative accounts.

Based on the review, it has been decided to issue comprehensive guidelines on the measures to be put in place by the banks covering various aspects of classifying accounts and deposits as inoperative accounts and unclaimed deposits, as the case may be, 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.

These instructions (attached) are intended to supplement current efforts and activities by banks and the Reserve Bank to reduce the amount of unclaimed deposits in the banking system and return such deposits to their rightful owners/claimants.

These instructions are issued in exercise of the authorities provided by Sections 35A of the Banking Regulation Act, 1949, read with Sections 26A, 51, and 56 of the Act ibid, as well as all other sections of this Act or other laws allowing the Reserve Bank to issue such directions.

This circular is applicable to all Commercial Banks (including RRBs) and all Co-operative Banks. The revised instructions shall come into effect from April 1, 2024.

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