What is a Dormant Bank Account, Dormant Accounts at Banks

A savings account becomes dormant when there are no transactions carried out in the account for over a period of 2 years. It becomes dormant, if you have not operated your account for over 24 months as per RBI guidelines.

If your account has become dormant then you need to contact your bank's home branch for re-activating your account & KYC updation so that you can enjoy all the banking service without any difficulty.

According to RBI, following type of transactions will be considered for the purpose of classifying an account as 'dormant':

  1. A debit transaction e.g. Cash withdrawal via ATM
  2. A credit transaction e.g. Deposit of cash / cheque
  3. A customer induced transaction e.g. if the interest on Fixed Deposit account is credited to the Savings Bank account as per the mandate of the customer
  4. A third party transaction e.g. Internet banking transaction

However, the service charges levied by the bank or interest credited by the bank are not considered as transaction for the purpose of classifying an account as 'dormant'.

What the Bank will do in Order to Protect Any Account From being Dormant?

The banks make annual review of all savings bank account and current accounts and in case there is no transaction, the bank is required to inform the account holder to activate the account by making some transaction. If the account is not activated in the second year too then the bank is again required to inform the customer three months in advance of the account being classified as dormant.

It is mandatory for the banks to credit the interest on savings bank accounts on regular basis whether the account is operative or not.

Consequences of Any Account being Dormant

Account holder may face many consequences on his/her account being dormant like cheque book be cannot be issued, address cannot be changed, no cash withdrawal from an ATM, no transaction through internet banking, no renewal of ATM/debit card etc.

Reactivation of Dormant Account

To reactivate the dormant account, the account holder has to submit a request to the bank in person to change the status of the account from 'Dormant to Active' indicating the reasons for not operating the account in the past along with a copy of the pass book or cheque of his/her savings bank account or current account. The account holder has also to submit 2 recent colour passport size photos and KYC documents. Please note that banks do not levy any charge for reactivation of dormant accounts as per RBI guidelines. The reactivation process differs from one bank to another. The account generally gets activated within 24 hours.

Documents Required for Reactivating Dormant Account

Following papers should be provided by the account holder to the bank for reactivating dormant account.

  • Duly filled up application for reactivating dormant account
  • KYC documents, should be self-attested
  • Proof of making atleast one financal transaction in the bank account