New Delhi, Dec 2 (FN Agency) Concerned over rising Inoperative Accounts / Unclaimed Deposits in banks, the Reserve Bank of India has asked all commercial banks to undertake regular reviews and take appropriate steps to reduce such instances and provide every help to customers to complete their KYC at the earliest and has asked them to submit progress report every quarter. The banks are required, among other things, to undertake an annual review of accounts/ deposits where there are no customer induced transactions for more than a year; segregation in their Core Banking Solution of accounts opened for credit of scholarship amount and/ or Direct Benefit Transfer (DBT)/ Electronic Benefit Transfer (EBT) under Government Schemes to facilitate credit of DBTs even if such accounts have become inoperative; and take steps to trace the customers of these accounts/ deposits, the RBI said in a notification.
RBI has issued operational guidelines for activation of such accounts/ deposits, customer awareness measures such as public awareness and financial literacy campaigns to be undertaken by banks and requires information on the process for activation of such accounts/ deposits to be displayed on the banks’ websites and branches. The Department of Supervision, RBI, recently conducted an analysis, which revealed that the number of inoperative accounts/ unclaimed deposits in several banks was on the higher side vis-a-vis their total deposits as well as in absolute terms. The reasons were attributed to either inactivity for a long time or pending updation/ periodic updation of KYC in such accounts. Reportedly, there were instances of customers facing inconvenience when they approached the bank branches for activation of inoperative accounts including inadvertent errors in customer details such as mismatch in name, etc. It was also observed that a few banks have a large pendency of accounts that are due for updation/ periodic updation of KYC, resulting in such accounts getting frozen for further transactions as per bank’s internal policies.
The banks are, therefore, advised to take necessary steps urgently to bring down the number of inoperative/ frozen accounts and make the process of activation of such accounts smoother and hassle free, including by enabling seamless updation of KYC through mobile/internet banking, non-home branches, Video Customer Identification Process, etc. While the accounts of beneficiaries of various Central/State government schemes like DBT/EBT etc., are required to be segregated to facilitate uninterrupted credit of such DBT/EBT amounts in their accounts, instances have been observed where the accounts of such beneficiaries have been frozen due to other factors such as pending updation/ periodic updation of KYC. “Since these accounts mostly pertain to the people from the underprivileged sections of the society, the banks may facilitate the process of activation of accounts by taking an empathetic view in such cases. The banks may also organise special campaigns for facilitating activation of inoperative/ frozen accounts. Besides, the banks may also facilitate Aadhaar updation for customers through the branches providing Aadhaar related services,” the RBI insisted. Instructions have been issued separately to SLBCs to proactively monitor the situation in their respective jurisdictions with a view to minimise customer inconvenience.