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If you don’t use your saving/current bank account for any transaction (credit/debit except interest credited to the bank, deduction of service charges) for a period of 1 year, the account becomes inactive. It can also turn dormant if not used for straight 2 years. This account can be marked as ‘inoperative’ by the bank if you don’t reply to their emails, call alerts, and letters.

In any case, the primary objective is to avoid any misuse of the balance amount in such dormant accounts. The Reserve Bank of India (RBI) has laid out the guidelines for banks to “play a more proactive role in finding the whereabouts of the account holders whose accounts have remained inoperative”.

Role of banks

If a bank account is found inactive for over 12 months, the banks are directed to inform those customers in writing and understand the rationale behind it. The account is again marked as operative and given one year’s extension if the customer replies to the bank’s query.

“However, in case the account holder still does not operate the same during the extended period, banks should classify the same as inoperative account after the expiry of the extended period,” RBI circular quoted.

Transactions required to keep savings account active

Customer-induced transactions are enough to keep the bank notified that your account is active. Some of them are listed below:

-Outward bill

-Inward bill

-Transactions through cheque.

-Deposit of cash

-Deposit through cheque

-Cash withdrawal or deposit via ATM.

-Internet banking transaction

-Crediting interest earned mandate on Fixed deposit to Savings Bank Account

Impact of dormant account

If your bank account is categorized as dormant, the restrictions on everyday account operations gradually become tighter and you won’t be allowed to enjoy the usual benefits. This can include the following:

-You cannot request a change of address

-You cannot request a signature modification

-Addition or deleting a joint holder not allowed

-Renewal of ATM/debit card not allowed

-No cash withdrawal from an ATM

-No transactions either through internet banking or a branch of the bank

How to reactivate a dormant bank account?

Customers are required to visit the nearest bank branch and submit an application to reactivate the dormant account. It is up to the bank to activate the dormant account either within 24 hours or it may take further time to assess the risk category of the customer.

On receiving the KYC (Know Your Customer) documents, banks can allow customers to activate the dormant account. In certain cases, the bank may also require a signature verification from the applicant apart from the KYC documents.

RBI has instructed all the banks to not charge any extra fee for the activation of any inoperative accounts. Even the interest on the savings account should be credited irrespective of the fact that the account is operative or not.