RBI bars banks from charging fee on activation of accounts

Unpaid fixed deposits will also

attract savings bank rate

No transaction for over two years

can be treated as dormant account

MUMBAI: The Reserve Bank of India on Friday said bank customers who do not operate their accounts regularly will continue to earn interest rate of 3.5 per cent on savings bank accounts and on fixed deposits after the maturity period.

“Interest on savings bank account should be credited on a regular basis whether the account is operative or not. If a fixed deposit matures and proceeds are unpaid, the amount left unclaimed with the bank will attract savings bank rate of interest,” the RBI said in a notification.

At present, banks pay 3.5 per cent on savings bank deposits.

The RBI has also barred banks from charging any fee on activation of inoperative accounts.

Asking the banks to play a more pro-active role in dealing with inoperative accounts, the RBI said they should launch a special drive for find out the whereabouts of the account holders or their legal heirs directly or through the introducers.

It further said that savings as well as current account should be treated as inoperative/dormant if there is no transaction in the account for over two years.

The RBI further said the debit as well as credit transactions should be considered for classifying a bank account operative or inoperative. Service charges levied by banks, however, will not make an inoperative account operative.

Banks have also been advised to ensure that amounts lying in inoperative account ledgers are properly audited by their internal auditors as well as statutory auditors.

The RBI has asked banks to contact customers in case accounts have remained inoperative for more than a year and transfer the balance in the new accounts wherever they are available.

In case the letters send to customers of inoperative accounts are returned undelivered, the banks would be required to initiate an inquiry to find out the whereabout of customers or their legal heirs in case they are deceased.

Banks have also been asked to trace the customers through persons who had introduced the account holder or through telephone and e-mails in case of non-resident accounts. These steps, the RBI said, were being taken as “there is a feeling that banks are undeservedly enjoying the unclaimed deposits, while paying no interest on it.”

Asking the banks to segregate the inoperative account with a redoing risk of frauds, the RBI said, “the customer should not be inconvenienced in any way, just because his account has been rendered inoperative.”

Suspicious transactions, it added, should be monitored at a higher level for the purpose of preventing fraud and making the suspicious transactions report. — PTI