RBI Eases KYC Process for Reactivating Inoperative and Unclaimed Deposit Accounts
The RBI eased KYC norms for reactivating inoperative and unclaimed deposit accounts by permitting updates via any branch, video KYC, and Business Correspondents.
The Reserve Bank of India (RBI) issued a notification dated June 13, 2025, amending its guidelines on the reactivation of inoperative and unclaimed deposit accounts by easing KYC requirements and allowing updates through any branch, video KYC, or authorized Business Correspondents. What Are Inoperative and Unclaimed Accounts? Accounts are classified as inoperative or unclaimed...
The Reserve Bank of India (RBI) issued a notification dated June 13, 2025, amending its guidelines on the reactivation of inoperative and unclaimed deposit accounts by easing KYC requirements and allowing updates through any branch, video KYC, or authorized Business Correspondents.
What Are Inoperative and Unclaimed Accounts?
Accounts are classified as inoperative or unclaimed when there has been no customer-initiated transaction for 10 years or more. Under the RBI’s Depositor Education and Awareness (DEA) Fund Scheme, 2014, such accounts are required to be reported, and the funds transferred to the DEA Fund maintained by the RBI.
The funds remain claimable by customers, but reactivation traditionally required a visit to the home branch and submission of Know Your Customer (KYC) documents, an often inconvenient process, especially for senior citizens, migrants, and rural account holders.
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Key Reforms Announced
In a huge relaxation of rules, the RBI has now directed banks to make the KYC updation process more accessible through the following measures:
1. KYC Updation at All Branches
Banks must now allow KYC updation and account reactivation at any of their branches, including non-home branches, removing the earlier restriction that required customers to visit their original branch.
2. Video KYC (V-CIP) Facility Encouraged
To reduce the need for in-person visits, banks are encouraged to offer Video Customer Identification Process (V-CIP) as an option for KYC. This allows customers to update their details remotely using a secure video call, following the RBI’s existing guidelines under the Master KYC Directions, 2016.
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3. Business Correspondent (BC) Assistance Allowed
Banks can also use authorized Business Correspondents (BCs) to help customers update their KYC and reactivate dormant accounts. BCs, who often operate in rural and semi-urban areas, can collect self-declarations and documents and forward them securely to the bank. This step aligns with recent amendments under paragraph 38(a)(iia) of the Master KYC Directions.
The instructions are effective immediately, and all eligible banks are expected to put the necessary systems in place without delay.
Customers with inoperative accounts or unclaimed deposits are advised to contact their banks to explore the newly available options, be it updating KYC through any branch, via video call, or with the help of a Business Correspondent.
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