RBI’s New Guidelines: Closure of Dormant, Inactive, and Zero Balance Accounts

Current Context: Starting January 1, 2025, the Reserve Bank of India (RBI) implemented new guidelines aimed at closing dormant, inactive, and zero balance accounts.

• Here’s a breakdown of the key points:
• Dormant Accounts: These are accounts that have had no activity for over two years. They will be closed under the new guidelines.
• Inactive Accounts: Accounts with no activity for over 12 months will also be subject to closure.
• Zero Balance Accounts: Accounts that have no balance will be closed to enhance banking security.
• Reactivation: Account holders can reactivate their accounts by updating their Know Your Customer (KYC) details and making regular transactions.
• These measures are intended to improve banking security, reduce the risk of fraud, and enhance overall efficiency in the banking system.

Question:

1 Under the new RBI rules, what is the status of an account that has no activity for over 12 months?

• A) Active
• B) Dormant
• C) Inactive
• D) Closed automatically

Answer: C) Accounts with no activity for over 12 months are categorized as inactive and are subject to closure under the RBI's new regulations.