Have An Inoperative Bank Account? Here's How To Reactivate A Dormant Account

A savings or current bank account is called inactive or dormant when there are no transactions in it for over two years. "A savings as well as a current account should be treated as inoperative/dormant if there are no transactions in the account for over a period of two years. For the purpose of classifying an account as 'inoperative' both the type of transactions i.e. debit as well as credit transactions induced at the instance of customers as well as a third party should be considered,” according to RBI notification.

If you have an inoperative account, you can reactivate it in no time. You can do this by getting in touch with your bank or by initiating a deposit. However, if your bank has remained inactive for over 10 years, the bank might transfer the rest of the amount or the unclaimed deposit to the Depositor Education and Awareness Fund of the Reserve Bank of India (RBI). To retrieve this fund, you need to contact the RBI.

Also Read: State Bank Of India Raises Fixed Deposit Rates By Up To 75 BPs

How To Activate An Inactive Account: You need to take care of certain banking duties such as paying bills, depositing, or withdrawing cash, or transferring money, in case you want to activate your dormant savings account. Some banks offer an Internet banking facility to activate inactive savings accounts. For your account activation, you can also approach the bank’s branch or customer care.

You need to file a formal request along with proof of identity, in order to activate a dormant savings account. You may also include your signature during the account activation process. When filing your income tax return, make sure to provide information about your active, inactive, and dormant current and savings accounts. You must include information about all your bank accounts held in India during the preceding year, except for those inactive for over three years.

It's important to note that the specific way banks communicate with their customers about their inactive accounts could differ from bank to bank. So, customers should get in touch with their respective banks for more detailed information. You must also update your Know Your Customer (KYC) information. This move will help you avoid any inconvenience and provide ready access to your funds.

Also, you must not neglect messages from the bank about your KYC updates or reactivating transactions when conducting transactions. For example, your bank might freeze your account temporarily or opt to close it completely. This move could be challenging for you in terms of accessing your funds. This could even impact your credit score.