MUMBAI: The Reserve Bank has issued new guidelines to activate inactive bank accounts and also to help get back unclaimed deposits.
The new updated guidelines, which go into effect immediately, provide more flexibility by allowing KYC updates via any bank branch, video-based verification, and with the assistance of business correspondents.
In a notification issued Thursday, the RBI said, “a bank shall make available the facility of updation of KYC for activation of inoperative accounts and unclaimed deposits at all branches (including non-home branches). Further, a bank shall endeavour to provide the facility of KYC updation in such accounts and deposits through video-customer identification process (V-CIP).
Additionally, the services of an authorised bank BCs may be utilised for the activation of inoperative accounts.
Bank accounts that haven’t been used or operated for 10 years or more are considered inoperative. Similarly, deposits that remain unclaimed for a decade also fall under this category and as of FY24, this amounted to around Rs 74,000 crore of which Rs 8,000 are with SBI alone.
As per existing rules, the balance in such accounts is required to be transferred by banks to the Depositor Education and Awareness (DEA) Fund, maintained by the RBI.
The new rules on inoperative accounts include the KYC updation at any branch: Banks must now provide the facility to update KYC documents for inoperative accounts and unclaimed deposits at all branches, including non-home branches. This means customers no longer need to travel to the branch where the account was originally opened.
Video KYC option: additionally, banks are urged to provide the V-CIP for KYC updates. This remote facility is especially useful for senior citizens, NRIs, and rural clients because it enables users to finish the verification process from the comfort of their own homes via a video call.
Support via BCs: Banks’ authorised BCs who frequently work in isolated or underserved areas, can now assist clients with updating their KYC and reactivating their accounts.
On the new procedures to reactivate inoperative accounts include, the RBI said for activation of inoperative accounts, the customer can update her KYC information/data at home/ non-home branch of the RE, and also through V-CIP, subject to the facility of V-CIP being provided by the bank.
To ease the process of activating the inoperative accounts, a bank shall make available the facility of updation of KYC at all branches of the bank, through V-CIP if requested by a account holder, subject to the facility of V-CIP being provided by the bank, according to the RBI’s FAQs on KYC.
Source: The New Indian Express
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