How to regularize a dormant or inoperative bank account?

On 6^th April 2023, Shaktikanta Das, the governor of RBI (Reserve Bank of India), decided to develop a centralized platform to facilitate claims for unclaimed deposits better. This even includes deposits lying in dormant savings bank accounts. So, all claimants can now search for their promises, including stakes in bank saving accounts, at a centralized portal to submit their claims easily.

This brings forth an important question – What steps must you take if your offline or online savings account is inoperative or dormant due to no banking operations over the period? In this scenario, you must reactivate your inactive bank account to claim the deposits in the report.

What’s a dormant bank savings account?

A dormant account is blocked, which stops you from performing your non-financial and financial banking transactions. Financial transactions include cash withdrawals and deposits transferring money through routes like RTGS, NEFT, IMPS, and UPI. Non-financial transactions have requests for debit cards, cheque book, passbooks, etc.

When does a bank savings account become inoperative or dormant?

Your savings account becomes dormant if no transaction is reported from your savings bank account for two years. There may be various reasons for your bank account to report no transactions, like having no debit card or checkbook, not logging into your mobile or online banking account, using other bank accounts, inability to track multiple savings account transactions, etc.

Suppose you change your address and fail to inform your bank. In that case, your bank owing to the lack of information, will consider your previous address still valid and send all your bank-linked documents, like a checkbook, debit card, passbook, etc., to the incorrect address. Again, this may result in inadequate savings account usage, which may make your account dormant over time.

Note that if you do not use your bank account for a year, the bank addresses your account as inactive and sends you reminders through letters, SMS, or email to perform a transaction to activate your account. If there is no response for two years, your bank changes your account status to dormant from inactive. A dormant account disallows you from making any transaction using your bank account.

However, holding a dormant account does not infer you have lost your account balance. You can approach your bank physically to place a request to reactivate your account and begin your transaction again. Remember that your bank deposit will still earn the savings bank interest rate despite being dormant.

How can you reactivate your dormant savings account?

To request the reactivation of your dormant bank account, you must connect with your bank and provide a reactivation application along with your KYC (know your customer) documents, including your identity and address verification. Once you have submitted an activation request, it might take two to three days to reactivate your dormant account, based on the bank’s internal policy.