RBI issues guidelines on bank classification of unclaimed deposits

The Reserve Bank of India on Monday released comprehensive guidelines on the measures to be put in place by banks while classifying accounts and deposits as inoperative accounts and unclaimed deposits.

This includes periodic review of such accounts and deposits, measures to prevent fraud in such accounts/deposits, grievance redressal mechanism for expeditious resolution of complaints, steps to be taken for tracing the customers of inoperative accounts including nominees or legal heirs for account re-activation, claims settlement or closure.

This move comes after RBI launched “100 Days 100 Pays” campaign in June last year, under which banks must trace and settle the top 100 unclaimed deposits of every bank in every district. The deadline for the scheme, which was to end on 8 September, has now been extended to 1 April 2024.

Under the new guidelines, RBI said banks shall undertake at least an annual review in respect of accounts where there is no customer induced transactions for more than a year. “In cases where there is no explicit mandate to renew the term deposit, the banks should review such accounts if the customers have not withdrawn the proceeds after maturity or transferred these to their savings/current account in order to prevent such deposits from becoming unclaimed,” it said.

RBI also said banks shall not classify zero balance accounts as ‘inoperative’ if it remains non-operative for a period of more than two years. “Central and State governments have been expressing difficulty in crediting cheques/Direct Benefit Transfer/ Electronic Benefit Transfer/ scholarship amount in these accounts as they are also classified as inoperative due to non-operation for two years,” it said.

Banks shall ensure that amounts lying in inoperative accounts or unclaimed deposits and reactivated will be put under concurrent audit, according to the new norms. All transactions in these accounts, which are reactivated, will be monitored regularly for at least six months, at higher levels without the knowledge of the customers and dealing staff.

The balance in savings or current accounts not operated for 10 years and term deposits not claimed for 10 years from the date of maturity are classified by banks as unclaimed deposits. These amounts are transferred to the depositor education and awareness (DEA) fund maintained by RBI.

Mint had reported that RBI has been constantly monitoring the progress made by banks in classifying the accounts as unclaimed deposits.