The Reserve Bank of India (RBI) has issued a new circular that brings good news for numerous bank account holders who have not been actively using their accounts. Starting from the next fiscal year 2024-25, these accounts will no longer be required to maintain a minimum balance, relieving them from the associated charges.
Key Highlights
- New Rules for Inactive Accounts: The RBI’s circular specifies that accounts that have been inactive for over two years will not be subject to minimum balance maintenance charges.
- Effective from Next Fiscal Year: This new regulation is set to be implemented from April 2024, marking the beginning of the fiscal year 2024-25.
- Accounts with Scholarships and Direct Benefit Transfers: Accounts opened for scholarships or Direct Benefit Transfers cannot be classified as inactive, even if they haven’t been active for more than two years.
- Impact on Banking System: These guidelines are expected to reduce the volume of unclaimed deposits in the banking system and ensure that these funds reach the rightful claimants.
- Proactive Measures by Banks: Banks are directed to contact the account holders of these inactive accounts through SMS, email, or letters, informing them about the status of their accounts.
- No Charge for Reactivating Accounts: Account holders wishing to reactivate their inactive accounts can do so without any activation charge.
- Report on Unclaimed Deposits: As per RBI’s report, there was a 28% increase in unclaimed deposits by March 2023, amounting to approximately INR 42,272 crores.
Significance
This move by the RBI is a significant step in favor of consumers, especially those who have been penalized for not maintaining a minimum balance in their infrequently used accounts. It also aligns with the broader objective of making banking more inclusive and customer-friendly.
The RBI’s new circular is a welcome change for many bank customers, offering relief from the penalties associated with maintaining minimum balances in inactive accounts. This decision is expected to enhance the efficiency of the banking system and ensure better management of unclaimed deposits.
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