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RBI has issued guidelines for inoperative accounts and unclaimed deposits

Published on January 03, 2024
Current Context: The Reserve Bank of India (RBI) has indeed issued fresh guidelines to reduce the quantum of inoperative bank accounts and unclaimed deposits on January 1, 2024. The revised instructions will come into effect from April 1, 2024.
RBI has issued guidelines for inoperative accounts and unclaimed deposits
  • Here are some key points from the guidelines:
    • Banks are required to undertake at least an annual review of accounts where there are no customer-induced transactions for more than a year.
    • The guidelines focus on tracing customers and reducing fraud risk.
    • They include measures for a periodic review of such accounts and deposits, and steps to be taken for tracing the customers of inoperative accounts.
    • Banks are required to contact the holder(s) of the inoperative account/unclaimed deposit through letters, email, or SMS.
    • If the whereabouts of the holder(s) are not traceable, the banks shall contact the introducer, if any, who had introduced the account holder to the bank at the time of opening of the account.
    • Banks are required to credit interest on savings accounts regularly irrespective of the fact that the account is in operation or not.
    • No charges shall be levied for activation of inoperative accounts.

Question:

Q.1 What action are banks required to take if the holder(s) of the inoperative account/unclaimed deposit are not traceable?
a. Close the account
b. Transfer the funds to a government account
c. Contact the introducer who had introduced the account holder at the time of account opening
d. None of the above

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