From January 1, 2025, some of the bank accounts will be closed as per the Reserve Bank of India’s (RBI) new guidelines. As per the central bank’s directives, three specific types of bank accounts will be closed to enhance security, reduce fraud, and improve the overall efficiency of banking operations.
Dormant accounts: Inactive accounts, defined as accounts with no activity for a period of two years or longer, will be labeled as dormant. These accounts are at increased risk of being targeted by hackers and fraudulent individuals. The RBI’s initiative to close such accounts aims to safeguard customers and maintain the security of the banking sector
Inactive accounts: Accounts that have shown no transaction activity in the last 12 months or longer are considered inactive. Account holders must reach out to their bank branch and complete the required steps to reactivate their account if no transactions have been made during this time. This initiative is aimed at lessening the workload for banks, improving operational effectiveness, and decreasing the likelihood of online fraud.
Zero balance accounts: Accounts with a zero balance for an extended period may be subject to closure. The primary objective of the RBI is to eliminate the misuse of these accounts, mitigate financial risks, and encourage consistent communication between customers and their banks. This initiative also serves to strengthen compliance with Know Your Customer (KYC) regulations, ensuring that customer information is up-to-date and accurate.
Steps to revive dormant accounts
To avoid account closure, account holders should take the following actions:
Reactivate inactive accounts: If an account has been inactive for over 12 months, it is recommended to make at least one transaction.
Engage with dormant accounts: Accounts that have been dormant for two years should be reactivated by visiting the bank branch.
Maintain a positive balance: It is important to ensure that the account does not remain at a zero balance for an extended period.
