RBI Proposes Simplified Guidelines to Reactivate Inoperative Accounts and Access Unclaimed Deposits [Read Notification]

The Reserve Bank of India (RBI) has issued Notification No. 2025-2026/403 dated May 23, 2025, announcing a draft circular that proposes revised and simplified instructions for handling inoperative bank accounts and unclaimed deposits.

The draft, titled "Inoperative Accounts / Unclaimed Deposits in Banks – Revised Instructions (Amendment) 2025", aims to amend the earlier guidelines issued on January 1, 2024. It seeks to enhance transparency, ease operational procedures, and improve customer access to dormant or forgotten funds held in banks.

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Key Changes Proposed

The amendment specifically substitutes paragraph 6.1 of the existing instructions with the following provisions:

• Banks must allow KYC updation for reactivation of inoperative accounts or claiming unclaimed deposits at all branches, including non-home branches.
• Customers may also request to complete KYC via the Video-Customer Identification Process (V-CIP), provided the bank offers this service.
• The process must adhere to RBI’s Master Direction – KYC (2016) guidelines, as updated from time to time.
• Additionally, authorized Business Correspondents (BCs) may be utilized to facilitate KYC and reactivation, as per paragraph 38(a)(iia) of the Master Direction.

Rationale

Under the current framework, banks are required to transfer any deposit account balances or unclaimed funds not operated upon for 10 years or more to the Depositor Education and Awareness (DEA) Fund, managed by the RBI. However, limited access to KYC facilities and branch-specific restrictions have posed hurdles for genuine account holders.

The proposed changes aim to improve customer accessibility, empower Business Correspondents, and promote the use of digital KYC tools, thereby reducing the volume of dormant funds and increasing public trust in the financial system.

Legal Backing

The draft has been issued under the powers conferred by Sections 35A, 26A, 51, and 56 of the Banking Regulation Act, 1949, and other enabling provisions, granting RBI the authority to update regulatory instructions in this domain.

Public Consultation Open

RBI is seeking public and stakeholder comments on the draft circular until June 6, 2025. Responses may be submitted via the “Connect 2 Regulate” section of the RBI website, or addressed to:

The Chief General Manager
Business Conduct Group, Department of Regulation
Reserve Bank of India, 12/13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001
Or via email

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For more information or clarification, the RBI’s Department of Communication can be reached at helpdoc@rbi.org.in or by phone at 022-2266 0502.

To Read the full text of the Notification CLICK HERE

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