RBI Proposes Easier Access to Inoperative Bank Accounts; Public Feedback Open Until June 6, 2025

The Reserve Bank of India (RBI) has proposed a significant change aimed at helping account holders activate their inoperative bank accounts and claim unclaimed deposits more easily. Announced on May 23, 2025, these proposed rules are currently in draft form and open for public feedback until June 6, 2025.

KYC Updates to Be Available at All Branches and via Video

Under the new draft guidelines, banks will be required to provide facilities for Know Your Customer (KYC) updates at all branches, including non-home branches.

This means customers can update their KYC documents not only at the branch where the account was originally opened but at any branch of the bank.

Furthermore, banks must offer video KYC (V-CIP) if the customer requests it, enabling remote and convenient identity verification.

Reactivation of Inoperative Accounts Made Simpler

Once the KYC process is completed, customers will be able to reactivate their inoperative accounts or claim previously unclaimed funds, simplifying a process that has traditionally been cumbersome.

Unclaimed Funds Transferred to RBI’s DEA Fund After 10 Years

If bank accounts remain inactive or deposits unclaimed for ten years or more, the balances are transferred to the RBI’s Depositor Education and Awareness (DEA) Fund.

This is similar to how unclaimed shares are moved to the Investor Education and Protection Fund (IEPF) after seven years. By easing the reactivation process, RBI’s proposal aims to reduce the number of accounts becoming dormant and help customers reclaim their funds before they are transferred to the DEA Fund.

How to Submit Your Feedback on the Draft Circular

RBI is inviting public comments and suggestions on the draft circular. Stakeholders can submit their feedback through the ‘Connect 2 Regulate’ section on the RBI website or send it directly to the Chief General Manager, Business Conduct Group, Department of Regulation, Reserve Bank of India.

Once the public consultation period ends on June 6, 2025, the RBI will review the inputs and finalise the guidelines. This initiative reflects the RBI’s ongoing efforts to improve customer experience in banking and protect depositor interests.

Read More: SBI Report- Bumper RBI Dividend to Boost India’s Economic Growth.

Conclusion

By enabling KYC updates at any branch and introducing video KYC options, the process becomes more accessible and user-friendly. Public participation in providing feedback until June 6, 2025, will be crucial in shaping the final guidelines. Account holders are encouraged to stay informed and take timely action to reactivate dormant accounts and claim their funds before transfers to the DEA Fund occur.

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