Syllabus: GS-III
Subject: Indian Economy
Topic: Government Budgeting.
Context: The RBI has asked banks to undertake at least an annual review in respect of accounts, where there have been no customer-induced transactions for more than a year.
Synopsis:
- The RBI’s revised guidelines allow customers to reactivate inoperative accounts/unclaimed deposits by submitting fresh KYC documents at any bank branch.
- An account is deemed inoperative if no customer-induced transactions occur for over two years.
- The RBI instructs banks to conduct an annual review and communicate inactivity to account holders. Unclaimed deposits, inactive for ten years, are to be classified as such.
- Banks should segregate zero balance accounts for government beneficiaries. Reactivation is facilitated through KYC updation, including a video-CIP option.
- Banks cannot charge for reactivation, penalize for non-maintenance of minimum balances, and must continue interest payments on savings accounts.
