Reserve Bank of India (RBI) has announced new regulations that will lead to the closure of certain types of bank accounts starting January 1, 2025. This initiative aims to improve banking security, reduce fraud, and enhance operational efficiency. The accounts affected by these guidelines include dormant accounts, inactive accounts, and zero balance accounts. Here’s what you need to know:
Types of Accounts Facing Closure
1. Dormant Accounts:
Accounts that have not shown any transaction for two or more years will be classified as dormant. These accounts are more susceptible to misuse and fraud, making their closure essential for maintaining banking security.
2. Inactive Accounts:
If an account has had no transactions for over 12 months, it will be considered inactive. To prevent closure, account holders must reactivate the account by making at least one transaction.
3. Zero Balance Accounts:
Accounts that have been maintaining a zero balance for an extended period may also be closed. This step is intended to eliminate the misuse of such accounts and ensure compliance with Know Your Customer (KYC) norms.
Steps to Avoid Account Closure
To ensure your account remains active and open, customers are advised to take the following actions:
- Reactivate Inactive Accounts: If your account has been inactive for over 12 months, make a transaction to reactivate it.
- Engage with Dormant Accounts: Accounts that have been dormant for two years should be reactivated by visiting the bank branch.
- Maintain a Positive Balance: Avoid leaving your account with a zero balance for long periods to keep it active.
Along with the account closures, RBI has introduced new rules for fixed deposits (FDs) with Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs). The new regulations simplify terms for premature withdrawal and aim to improve communication between financial institutions and depositors.
