When does RBI classify a bank account as dormant? Here's what rules for reactivation and unclaimed money say

A dormant or inoperative account is not a lost account. Whether the account has been unused for two years or the deposit has remained unclaimed for a decade, RBI's framework provides a route for the rightful account holder or beneficiary to recover the money.

That old savings or current account you stopped using may still hold your money. Under Reserve Bank of India (RBI) rules, an account can become inoperative after more than two years without customer-induced transactions, but that does not mean the balance is lost.

RBI has laid down procedures for customers to reactivate inoperative accounts and claim unclaimed deposits. Here's what happens when a bank account remains unused and how you can recover your money.

When does a bank account become dormant?

Under RBI rules, a savings or current account is classified as inoperative when there have been no customer-induced transactions for more than two years. Transactions initiated by the customer or a third party on the customer's behalf are considered, while bank charges and interest credited by the bank are generally not treated as customer-induced transactions.

Importantly, an inoperative account is not the same as a lost account. The balance remains associated with the account holder and can be accessed after completing the required process.

How can you reactivate an inoperative account?

RBI instructions require banks to provide facilities for KYC updation to activate inoperative accounts and unclaimed deposits at all branches, including non-home branches. Banks are also required to endeavour to offer KYC updation through Video-Customer Identification Process (V-CIP), where available. Authorised Business Correspondents can also facilitate KYC updation in eligible cases.