The Reserve Bank of India (RBI) has issued comprehensive guidelines on unclaimed deposits, making banks undertake special drives periodically to find out the whereabouts of customers with such accounts.

Banks are required to undertake at least an annual review of accounts where there is no customer-induced transactions for more than a year.

A customer inducted transaction can either be a financial (ATM/cash withdrawal or deposit, RTGS/NEFT transactions or debit card transactions among others), non-financial (request for cheque book or debit card, change in transaction limit among others) or KYC updation.

The revised instructions, which are to be effective from 1 April, are expected to complement the ongoing efforts and initiatives taken by banks and the RBI to reduce the quantum of unclaimed deposits in the banking system and return such deposits to their rightful owners/claimants.

The RBI notification said that a savings or current account would be treated as inoperative if there are no customer-induced transactions in the account for a period of over two years.

The central bank 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.

With regard to tracing customers of inoperative accounts/unclaimed deposits, it said, the bank shall contact the holder of such accounts through letters, email or SMS. 

The email/ SMS shall be sent on a quarterly basis, it said.

“In case the whereabouts of the holder(s) of the inoperative  account/unclaimed deposit are not traceable, the banks shall contact the introducer, if any, who had introduced the account holder to the bank at the time of opening of the account,” it said.

The banks shall also contact the nominee, if registered, for tracing the customer, it said. 

"The banks shall undertake special drives periodically to find out the whereabouts of the customers, their nominees or legal heirs in respect of inoperative accounts/unclaimed deposits," it said. 

As per the new norms, banks shall ensure that amounts lying in inoperative accounts or unclaimed deposits and reactivated will be put under concurrent audit.

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.

The RBI’s new move has come after it launched “100 Days 100 Pays" campaign in June last year. Under this, banks are required to trace and settle the top 100 unclaimed deposits of every bank in every district. The earlier deadline of 8 September for the scheme has now been extended to 1 April 2024.