Bank accounts are an essential part of our everyday life. It is through the bank account we manage our finances. Whether it is salary or any major business deal, it requires banks for it to be processed.
There has been an upward trend in opening bank accounts, especially after the introduction of Pradhan Mantri Jan Dhan Yojana which offers zero balance accounts and minimum documentation.
Digital Banking in India acted as a catalyst for increasing banking in India allowing everyone, from a farmer to a business man to open up a bank account.
With the ease of opening an account, people started opening multiple accounts in their name which tend to go dormant or inactive over time due to non-use.
In case you want to activate your inactive/Dormant account, then you’ll have to follow the procedure set by RBI. In this article, we will discuss How Long a Bank Account Be Inactive, RBI Guidelines, and much more.
But first, let’s find out what is Dormant Account or an Inactive Account is.
Table of Contents
What is an Inactive Account?
An inactive Account is an account which is not being used by the account holder for more than 12 months. In a bank account, there will always be a debit and credit process that takes place when the debit or credit from an account is not taking place for more than 12 months, then the account becomes inactive.
During the inactivation period, the account holder is not required to pay any maintenance charges however, the bank will charge a fee for the reactivation of the account.
What is a Dormant Account?
A dormant Account is an account which is not been used by the customer for more than 24 months and has been lying unused since that time. In Banking, an account gets dormant after attaining inactive status. The dormant account can be re-activated but for this physical verification is required which you’ll have to give by visiting the bank branch.
RBI Guidelines for Inactive Bank Accounts
Reserve Bank of India which is the central bank in India responsible for managing the banking sector in India provides some guidelines for the banks to follow. If you know these guidelines then you can make a smart decision and can know your rights when it comes to inactive accounts. The following are the RBI Guidelines for inactive Bank accounts-
- The banks will have to communicate to you about your account attaining inactive status proactively also they have to ask for the reasons for inactivity.
- After notifying, the customers will have 12 month response period allowing them sufficient time to reactivate their inactive accounts.
- Any transaction other than service charge and interest will be considered as bank activity which also includes third-party transactions like fund deposit, FD Account maturity, etc.
- The bank will not charge any additional charges for reactivating the dormant account
- The bank has to pay continuing interest payments to their savings account regardless of the account’s activity.
- The unclaimed FD Account which has matured will attract a savings bank interest rate ensuring that the customer gets their entitled returns.
How to Activate Inactive/Dormant Account?
To activate your inactive Account, you’ll have to simply make a transaction from your account. It can be debit or credit like paying some bill or depositing cash, withdrawals, etc.
You can also use the digital banking method to reactivate your bank account online. In case, your bank deactivates your digital banking then you’ll have to contact your bank branch or customer support for assistance for account activation.
For activating the Dormant account, you’re required to make a formal request for the reactivation by providing KYC documents. You’ll have to visit the bank branch and fill up the reactivation form along with the attached KYC documents. The bank may charge a fee for reactivation of the account.
Documents Required to Activate Inactive/Dormant Account
The following are the documents required to Activate an Inactive/Dormant Account-
- PAN Card
- Aadhaar Card
- Finger Print and Other KYC Procedures
FAQ
You can find out whether your account is dormant or not by logging into your digital banking account, visiting the bank branch, or using a debit card. If these operation is not occurring smoothly then chances are your account is dormant.
To activate your Dormant account, you are required to submit an Aadhaar Card, PAN Card, and other required KYC Documents.
There are no specified charges for reactivation, it depends on bank to bank. Your bank may charge a small fee for reactivation of your account.
No, inactive accounts can be easily activated by making transactions without requiring any additional procedure.
Yes, you can activate your inactive account after 3 years, you’ll have to visit the bank account and ask the bank representative for the activation of your dormant account. You’ll have to submit the KYC documents along with the reactivation form to get your account activated.
I’m Shiv Kumar, a graduate with a passion for finance, marketing, and technology. My journey into finance started with a desire to understand money management and investing.
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