To prevent your savings accounts from becoming dormant or inactive, it's advisable to conduct periodic transactions in each of them. Neglecting these accounts may result in them going unwatched. The Reserve Bank of India (RBI) has introduced the UDGAM portal for unclaimed Fixed Deposits (FDs) and savings accounts. This portal includes 30 banks, and individuals can check if their bank is on the list. Staying active with your accounts ensures they remain in good standing and readily accessible when needed.
What are dormant, inoperative accounts? When does a savings account become dormant?
An account is designated as 'inoperative' or 'dormant' if it experiences a two-year period with no transactions. Notably, interest credited and bank charges deducted are not regarded as transactions for this purpose. A social media post from PNB (formerly known as Twitter) clarifies that both savings and current accounts fall into this category if they remain inactive for over 24 months. It is advisable to take prompt action if your account meets this criterion to prevent it from becoming inoperative.
Is the customer typically notified by the bank when their account transitions into a dormant status?
As per the Frequently Asked Questions (FAQs) provided by the Tamilnad Mercantile Bank, the process for categorizing accounts as inoperative or dormant occurs in two stages. In the first stage, the bank is obligated to conduct an annual review of all Savings Bank and Current accounts. If there have been no "transactions" in the account, the bank is mandated to notify the account holder. To reactivate the account, the account holder can initiate a single debit or credit transaction, which can also be carried out by a third party.
Moving on to the second stage, if the account remains inactive in the subsequent year, the bank is again obliged to communicate with the account holder. This dual-stage process ensures that account holders are informed and given opportunities to revive their accounts before they are classified as inoperative. It is essential for account holders to be aware of these guidelines to prevent their accounts from falling into dormant status.
How can a dormant account be reactivated, and what is the reactivation procedure?
To transition an account from "Dormant to Active," the account holder is required to visit the bank in person and provide a letter along with their passbook (for savings accounts) or cheque book (for current accounts). They must also explain the reasons for the account's inactivity. Additionally, the account holder should submit relevant records and documents to the bank for verification. This procedure allows account holders to reactivate their dormant accounts and resume their regular banking activities.
• Recent colour passport size photo – 2 copies
• Copy of valid photo ID document
• Copy of valid address proof documents
Banks are not supposed to charge for reactivation of dormant accounts.
According to the Tamilnad Mercantile Bank website, a savings account remains active when transactions are in line with the customer's instructions. Credits initiated by the customer, such as salary deposits, are considered legitimate and maintain the account's operative status. Additionally, Electronic Clearing Service (ECS) credits (e.g., dividends) and debits (e.g., utility bill payments) contribute to keeping an account operative. In the case of multiple accounts, a customer can authorize a single debit from one account to credit another, ensuring the continued operability of both accounts.