Reserve Bank of India Governor Shaktikanta Das had at the monetary policy committee (MPC) meeting on April 6, 2023, announced the development of a ‘Centralised Web Portal’ to better facilitate the search and claims for unclaimed deposits.
This brings to attention the deposits lying dormant in savings bank accounts not claimed by depositors.
At present, depositors or beneficiaries of unclaimed bank deposits of 10 years or more have to go through multiple websites of banks to look for unclaimed deposits. But now, claimants will be able to search for all such accounts at a centralised platform.
This also brings forth the question what you should do if your account become dormant because of non-operation over the course of time. In that case, you will need to reactivate it to start using it again and claim any leftover deposits.
But before proceeding with reactivating a dormant account, let’s understand what a dormant account is and under what circumstances does it become dormant?
What Is A Dormant Account?
A dormant account means an account blocked by the bank for any transaction by the customer, including financial and non-financial transactions.
These financial transactions could be cash deposits and withdrawals, real-time gross settlement (RTGS), national electronic fund transfer (NEFT), immediate payment service (IMPS), and unified payment interface (UPI), among others. Non-financial transactions could be requests for cheque book, debit cards, and so on.
When Does An Account Become Dormant?
When there is no customer induced transaction in the account for two years, it becomes dormant. There could be many reasons for not operating an account, such as not having the chequebook or the debit card, forgetting online or mobile banking password, having accounts in different banks and not being able to keep track of all, and death of the account holder.
Many a times, people change their address, but they do not inform and submit the request for updating records in the bank. So, banks have old records, and thus, the documents that the banks send to the account holders, such as debit cards and cheque book, do not reach them, and their account becomes inactive due to no-operation.
For the first year, the banks classify such accounts as ‘inactive’ and send reminders to the customer through the mail, letter, etc. In the absence of any reply by the accountholder, the bank then changes the status of the account from being ‘inactive’ to ‘dormant or inoperative’. This means that no
transaction can be performed in the account by the account holder, including deposit, payment, transfer, etc.
But it does not mean that your money is lost. You can request your bank to reactivate it so that you can start doing the transactions from your account again.
Do note that your deposit in your dormant account will continue to earn interest from the bank despite its ‘dormant’ status.
How To Reactivate A Dormant Account?
To reactive your dormant account, you need to contact your bank branch and submit an application along with the ‘know your customer (KYC)’ documents, which should include an address proof and identity proof. Once you submit the request with the bank in person, it may take few hours to 2-3 days, depending on your bank’s internal processes to start the reactivation process.
Once the bank satisfies itself with all the required formalities, your account will become active again. It should be noted that reactivation of the account is not a chargeable service.
Once your account becomes active, you must ensure to keep it active by doing regular transactions in your account. Nowadays, transactions have become much easy thanks to mobile apps, UPI, and wallets.
In essence, all you need to do to prevent your account from becoming dormant is to keep track of it and make one transaction at least every few months lest it becomes inoperative.
