The Reserve Bank of India (RBI) has asked banks not to

Solution

The Reserve Bank of India (RBI) has asked banks not to classify zero balance accounts, which are opened for the beneficiaries of government schemes like direct benefit transfer (CBS), even if there is no activity in the account for two years. An account that has not been operated for two years is classified as inoperative. The RBI said customers have to submit KYC documents afresh for reactivating the account. Deposits maintained in any account, which have not been operated upon for 10 years or more, or any amount remaining unclaimed for 10 years or more, are required to be transferred by banks to the ‘Depositor Education and Awareness Fund Scheme’, which is maintained by the RBI. For the purpose of classifying an account as ‘inoperative’, only customer-induced transactions and not bank-induced transactions should be considered. The revised instructions will come into effect from April 1, 2024.