Executive Summary:
This RBI circular addresses the high number of inoperative accounts and unclaimed deposits in banks, attributing it to prolonged inactivity and pending KYC updates. Banks are urged to reduce these accounts, streamline the activation process, and facilitate seamless KYC updates through various channels. Progress must be monitored by the Customer Service Committee (CSC) of the Board and reported quarterly to the Senior Supervisory Manager (SSM) through the DAKSH portal, starting with the quarter ending December 31, 2024.
Key Points / Main Content:
* **Review of Inoperative Accounts & Unclaimed Deposits:**
* Banks must undertake an annual review of accounts/deposits with no customer-induced transactions for over a year.
* Accounts opened for scholarship/DBT/EBT under Government Schemes must be segregated in CBS to ensure uninterrupted credit of DBTs, even if inoperative.
* Banks should trace customers of inoperative accounts/deposits.
* Information on the activation process should be displayed on bank websites and branches.
* **Addressing Customer Inconvenience:**
* Banks need to reduce the number of inoperative/frozen accounts urgently.
* The activation process must be smoother and hassle-free, enabling seamless KYC updates via mobile/internet banking, non-home branches, and Video Customer Identification Process.
* For beneficiaries of Central/State government schemes whose accounts are frozen due to KYC issues, banks should take an empathetic view and facilitate activation.
* Special campaigns should be organized to facilitate the activation of inoperative/frozen accounts.
* Banks should facilitate Aadhaar updation through branches providing Aadhaar services.
* **Monitoring and Reporting:**
* The Customer Service Committee (CSC) of the Board must monitor the progress in reducing inoperative/frozen accounts and the special efforts made by banks.
* Banks must report the progress quarterly to the Senior Supervisory Manager (SSM) through the DAKSH portal, starting from the quarter ending December 31, 2024.
* A copy of this circular along with a monitorable action plan must be placed before the CSC of the Board in its next meeting.
Impact Analysis:
Banks:
* Impact: Banks are directly responsible for implementing the guidelines, reducing inoperative accounts, improving customer service, and reporting progress.
* Action Required: Conduct annual reviews, segregate DBT accounts, trace customers, streamline activation process, facilitate KYC updates, organize special campaigns, monitor progress through the CSC, and report to the SSM quarterly.
Customers:
* Impact: Customers, especially those from underprivileged sections and beneficiaries of government schemes, will benefit from a smoother activation process for inoperative accounts and easier KYC updates.
* Action Required: Customers with inoperative accounts should approach their banks to activate them, utilizing the streamlined processes and available channels for KYC updates.
Customer Service Committee (CSC) of the Board:
* Impact: The CSC of the Board needs to monitor the progress in reducing inoperative/frozen accounts.
* Action Required: Monitor progress, review special efforts made by the banks, and ensure full compliance in this regard.
Senior Supervisory Manager (SSM):
* Impact: SSM needs to supervise that the banks are taking necessary steps to adhere to the process.
* Action Required: Monitor reports from the banks quarterly to ensure compliance.
State Level Bankers' Committee (SLBCs):
* Impact: SLBCs need to proactively monitor the situation in their jurisdictions with a view to minimise customer inconvenience.
* Action Required: Proactively monitor to minimise customer inconvenience.
Key Entities Referenced
Reserve Bank of India (RBI): The central bank of India, responsible for regulating the banking sector.
All Commercial Banks excluding Regional Rural banks: The entities to whom this circular is addressed.
DOR.SOG LEG.REC6409.08.024202324: RBI circular dated January 1, 2024, regarding inoperative accounts and unclaimed deposits in banks.
Direct Benefit Transfer (DBT): A government scheme for transferring benefits directly to beneficiaries' accounts.
Electronic Benefit Transfer (EBT): A system for electronic delivery of government benefits.
KYC (Know Your Customer): The process of verifying the identity of customers.
Mumbai, Maharashtra: Location of the Department of Supervision, Central Office, Reserve Bank of India.
Customer Service Committee (CSC): A committee of the Board that monitors the progress in reduction of inoperative frozen accounts.
भारतीय �रजवर् बैंक
______________________RESERVE BANK OF INDIA ______________________
www.rbi.org.in
RBI/2024-25/91
DoS.CO.PPG.SEC.12/11.01.005/2024-25 December 02, 2024
The Chairman / Managing Director / Chief Executive Officer
All Commercial Banks (excluding Regional Rural banks)
Madam / Dear Sir,
Inoperative Accounts / Unclaimed Deposits in banks
A reference is invited to RBI circular DOR.SOG (LEG).REC/64/09.08.024/2023-24
dated January 1, 2024 on the captioned subject. It requires banks, among other
things, to undertake an annual review of accounts/ deposits where there are no
customer induced transactions for more than a year; segregation in their Core
Banking Solution of accounts opened for credit of scholarship amount and/ or Direct
Benefit Transfer (DBT)/ Electronic Benefit Transfer (EBT) under Government
Schemes to facilitate credit of DBTs even if such accounts have become inoperative;
and take steps to trace the customers of these accounts/ deposits. It also contains
operational guidelines for activation of such accounts/ deposits, customer awareness
measures such as public awareness and financial literacy campaigns to be
undertaken by banks and requires information on the process for activation of such
accounts/ deposits to be displayed on the banks’ websites and branches.
2. The Department of Supervision, RBI, recently conducted an analysis, which
revealed that the number of inoperative accounts/ unclaimed deposits in several
banks was on the higher side vis-a-vis their total deposits as well as in absolute
terms. The reasons were attributed to either inactivity for a long time or pending
updation/ periodic updation of KYC in such accounts. Reportedly, there were
instances of customers facing inconvenience when they approached the bank
branches for activation of inoperative accounts including inadvertent errors in
customer details such as mismatch in name, etc. It was also observed that a few
banks have a large pendency of accounts that are due for updation/ periodic
updation of KYC, resulting in such accounts getting frozen for further transactions as
per bank’s internal policies.
पयर्वेक्षण िवभाग, के�ीय कायार्लय, मेकर टावर - एफ़, कफ परेड, कोलाबा, मुंबई - 400 005
टेलीफोन: 022 - 6997 3817 ई-मेल: ppgdos@rbi.org.in
Department of Supervision, Central Office, Maker Tower - F, Cuffe Parade, Colaba, Mumbai - 400 005
Telephone: 022 - 6997 3817 e-mail: ppgdos@rbi.org.in
बैंक िह�ी में पत्राचार का �ागत करता है।3. The banks are, therefore, advised to take necessary steps urgently to bring down
the number of inoperative/ frozen accounts and make the process of activation of
such accounts smoother and hassle free, including by enabling seamless updation of
KYC through mobile/internet banking, non-home branches, Video Customer
Identification Process, etc. While the accounts of beneficiaries of various Central/
State government schemes like DBT/EBT etc., are required to be segregated to
facilitate uninterrupted credit of such DBT/EBT amounts in their accounts, instances
have been observed where the accounts of such beneficiaries have been frozen due
to other factors such as pending updation/ periodic updation of KYC. Since these
accounts mostly pertain to the people from the underprivileged sections of the
society, the banks may facilitate the process of activation of accounts by taking an
empathetic view in such cases. The banks may also organise special campaigns for
facilitating activation of inoperative/ frozen accounts. Besides, the banks may also
facilitate Aadhaar updation for customers through the branches providing Aadhaar
related services. Instructions have been issued separately to SLBCs to proactively
monitor the situation in their respective jurisdictions with a view to minimise customer
inconvenience.
4. The progress in reduction of inoperative/ frozen accounts and the special efforts
made by the banks in this regard, may be monitored by the Customer Service
Committee (CSC) of the Board. In addition, the banks are also advised to report the
same on a quarterly basis to the respective Senior Supervisory Manager (SSM)
through DAKSH portal, starting from the quarter ending December 31, 2024.
5. A copy of this Circular shall also be placed before the CSC of the Board in its next
meeting along with a monitorable action plan for ensuring full compliance in this
regard.
Yours faithfully,
(Tarun Singh)
Chief General Manager