Skip to main content

Inoperative Accounts / Unclaimed Deposits in Banks

Reserve Bank of India (RBI) has issued revised instructions on inoperative accounts / unclaimed deposits in the banks.

What is inoperative account and unclaimed deposit?

  • Inoperative account – A savings / current account shall be treated as inoperative, if there are no ‘customer induced transactions’ in the account for a period of over 2 years.
  • Unclaimed deposit – The credit balance in any deposit account maintained with banks, which have not been operated upon for 10 years or more, or any amount remaining unclaimed for 10 years or more.

What are financial and non-financial transactions?

  • Financial transaction – A monetary transaction in the savings / current account of the customer with the bank either by way of a credit or debit transaction.
  • Non-financial transaction – An enquiry or request for any product / service initiated by the account holder through any ATM / internet banking / mobile banking application of the bank or through Third Party Application Providers, or successful log-in to the internet banking / mobile banking application. For eg. change in transaction limit, request for issue of cheque book / credit card / debit card, nomination facility, balance enquiry, etc.

What are bank induced and customer induced transactions?

  • Bank induced transaction – Transactions in the account initiated by the bank such as charges, fees, interest payments, penalties, taxes.
  • Customer induced transaction – The transactions in account which are in the nature of –
    • Financial transaction initiated by or done at the behest of the account holder by the bank / third party.
    • Non-financial transaction.
    • KYC updation done in face-to-face physical mode or through digital channels such as internet banking or mobile banking application of the bank.

What is Unclaimed Deposit Reference Number (UDRN)?

Unclaimed Deposit Reference Number (UDRN) is a unique number assigned to each unclaimed account / deposit transferred to Depositor Education and Awareness (DEA) Fund of Reserve Bank of India (RBI). 

When and how shall banks review the accounts?

  • Banks shall undertake at least an annual review of accounts, where there is no customer induced transactions for more than a year. 
  • In cases where there is no explicit mandate to renew the term deposit, the banks should review such accounts if the customers have not withdrawn the proceeds after maturity or transferred these to their savings / current account. 
  • The banks shall inform the account / deposit holders in writing through letters / email / SMS that there has been no operation in their accounts / deposits in the last one year. The alert messages shall invariably mention that the account would become ‘inoperative’ if no operations are carried out during the next one year and, the account holder would be required to submit KYC documents afresh for reactivating the account.
  • If the letters are returned undelivered or no response is received, the bank shall immediately undertake an enquiry to find out the whereabouts of account holder or his / her nominee / legal heirs in case the account holder is deceased.
  • In case any response is received from the account holder giving the reasons for not operating the account, the banks shall continue to classify the account as operative for one more year and the account holder shall be advised to operate the account within the extended period of one year. In case the account holder still fails to operate the account, the banks shall classify the account as inoperative account after the expiry of the extended period.
  • In case the account holder is not carrying out transaction and the account is inoperative due to shifting of primary account to another bank, the account holder may be requested to provide the details of the new bank account with authorisation to enable the bank to transfer the balance from the existing bank account.
  • In case a customer is maintaining multiple accounts / deposits with a bank, all such accounts / deposits shall be assessed individually for the purpose of classifying them as inoperative account / unclaimed deposit.

What if accounts are opened for credit of scholarship / DBT?

The banks open zero balance accounts for beneficiaries of Central / State government schemes for credit of Direct Benefit Transfer (DBT) and for students who receive scholarship. These accounts shall not be classified as ‘inoperative’ even when they are not operated for more than 2 years. 

What are the instructions on activation of inoperative accounts?

  • The banks shall activate the inoperative accounts / unclaimed deposits, including those which are under freeze by orders of various agencies like Courts, Tribunals, Law Enforcement Agencies, only after updation of KYC. 
  • The bank shall automatically intimate the inoperative account / unclaimed deposit holders though SMS and registered email stating that on the basis of the KYC documents submitted by them, the inoperative status of the account has been removed. The intimation shall also mention the remedial measures available to them to report unauthorised access, if any. 
  • The banks shall process requests for activation of inoperative account / unclaimed deposits within 3 working days from the receipt of the complete application.
  • The transactions in inoperative accounts, which have been reactivated, shall be monitored regularly, for at least 6 months, at higher levels (i.e. by controlling authorities of the concerned branch) without the knowledge and notice of the customers and the dealing staff.

What are the instructions on interest / fees on inoperative accounts?

  • Interest on savings accounts shall be credited on a regular basis irrespective of the fact that the account is in operation or not.
  • The banks are not permitted to levy penal charges for non-maintenance of minimum balances in any account that is classified as an inoperative account.
  • No charges shall be levied for activation of inoperative accounts.

What are the instructions on search facility for unclaimed deposits?

  • Banks shall host the details of unclaimed deposits [only name, address (without pin code) and UDRN], which have been transferred to DEA Fund of RBI on their respective websites, which shall be updated at least on a monthly basis, and shall have a search option to enable the public to search for their unclaimed deposits.
  • The banks, which do not have their own websites shall make available the list of unclaimed deposits in their respective branches. 

From when shall the revised instructions be applicable?

The revised instructions shall come into effect from April 1, 2024.

What is UDGAM?

RBI has launched a Centralised Web Portal - UDGAM (Unclaimed Deposits – Gateway to Access inforMation) to facilitate and make it easier for the public to search their unclaimed deposits across multiple banks at one place. The portal also enables them to either claim the deposit amount or make their deposit accounts operative at their respective banks. 

Reserve Bank Information Technology Pvt Ltd (ReBIT), Indian Financial Technology & Allied Services (IFTAS) and participating banks have collaborated on developing the portal.

The search facility was initially made available on the portal for 7 banks (State Bank of India, Punjab National Bank, Central Bank of India, Dhanlaxmi Bank Ltd., South Indian Bank Ltd., DBS Bank India Ltd., Citibank N.A.) and for remaining banks it was planned to be made available in a phased manner by October 15, 2023. The search facility for 30 banks has been made available on the portal on September 28, 2023, which covers around 90% of such unclaimed deposits (in value terms) in Depositor Education and Awareness (DEA) Fund.


References

Reserve Bank of India. (2023, October 05). 'Onboarding of more banks on उद्गम UDGAM portal'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=56498

Reserve Bank of India. (2023, August 17). 'RBI launches उद्गम - UDGAM - Centralised Web Portal for searching Unclaimed Deposits'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=56216

Reserve Bank of India. (2024, March 05). 'FAQ - UDGAM Portal'. Retrieved from https://www.rbi.org.in/Scripts/FAQView.aspx?Id=166

Reserve Bank of India. (2024, January 01). 'Inoperative Accounts /Unclaimed Deposits in Banks- Revised Instructions'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12589&Mode=0


Follow at - Telegram   Instagram   LinkedIn   X   Facebook

Labels:

Comments

Post a Comment

Popular Posts

Highlights of RBI Annual Report 2023-24 – Chapter 7 to 12

Reserve Bank of India (RBI) has published its annual report for the financial year 2023-24. In a series of articles, we will go through the highlights of the report. This is the fifth and last article in the series.  Chapter 7 – Public Debt Management Ways And Means Advances (WMA) limit for the Government of India (GoI) for H1:2023-24 (April to September 2023) was fixed at ₹1,50,000 crore and for H2:2023-24 (October 2023 to March 2024) was fixed at ₹50,000 crore. RBI issued an ultra-long security of 50-year tenor aggregating ₹30,000 crore to cater to the growing needs of long-term institutional players. Issuance of Sovereign Green Bonds (SGrBs) for an aggregate amount of ₹20,000 crore included maiden issuance of 30-year (₹10,000 crore) SGrB in addition to 5-year (₹5,000 crore) and 10-year (₹5,000 crore) SGrBs. A new 3-year benchmark security was introduced as part of government market borrowing programme during H1:2023-24.  The basket of products offered through the ‘Retail ...
Post a Comment
Read more

RBI’s Monetary Policy (August 06, 2025): In A Nutshell

The bi-monthly monetary policy of Reserve Bank of India (RBI) was announced on August 06, 2025. Here are some of the highlights of the monetary policy announcement. Rates   Change Rate Policy repo rate Unchanged 5.50% Standing deposit facility (SDF) rate 5.25% Marginal standing facility (MSF) rate 5.75% Bank rate 5.75% Monetary policy stance Monetary policy stance unchanged as ‘neutral’. Domestic Economy  Real GDP growth for 2025-26 is projected at 6.5%. CPI headline inflation declined for the eighth consecutive month to a 77-month low (since January 2019) of 2.1% in June, driven primarily by a sharp decline in food inflation. Food inflation recorded its first negative print since February 2019 at (-) 0.2% in June. CPI inflation for 2025-26 is projected at 3.1%. India’s current account deficit (CAD) moderated to 0.6% of GDP in 2024-25 from 0.7% of GDP in 2023-24 due to robust services exports and strong remittances receipts despite higher merchandise trade deficit. As on Augus...
Post a Comment
Read more

Non-Fund Based Credit Facilities

Reserve Bank of India (RBI) has issued directions on non-fund based credit facilities. To whom shall the directions be applicable? The directions shall apply to the following Regulated Entities (REs) for all their Non-Fund Based (NFB) exposures such as guarantee, letter of credit, co-acceptance etc. Commercial Banks (including Regional Rural Banks and Local Area Banks) Primary (Urban) Co-operative Banks (UCBs) / State Co-operative Banks (StCBs) / Central Co-operative Banks (CCBs) All India Financial Institutions (AIFIs) Non-Banking Financial Companies (NBFCs) including Housing Finance Companies (HFCs) in Middle Layer and above, only for the issuance of Partial Credit Enhancement. The directions shall not apply to the derivative exposures of a RE. Which NFB facilities are permitted to be issued by RE? RE shall issue a NFB facility only on behalf of a customer having funded credit facility from the RE. However, this shall not be applicable in respect of – Derivative contracts entered int...
Post a Comment
Read more

Co-Lending Arrangements (CLAs)

Reserve Bank of India (RBI) has issued directions on co-lending arrangements which will replace the existing guidelines on co-lending by banks and Non-Banking Financial Companies (NBFCs) to priority sector. What is Co-Lending Arrangement (CLA)? Co-Lending Arrangement (CLA) refers to an arrangement, formalised through an ex-ante agreement, between a regulated entity (RE) which is originating the loans (‘originating RE’) and another RE which is co-lending (‘partner RE’), to jointly fund a portfolio of loans, comprising of either secured or unsecured loans, in a pre-agreed proportion, involving revenue and risk sharing. To whom shall the directions be applicable? The directions shall be applicable to CLAs entered into by the following REs – Commercial Banks (excluding Small Finance Banks, Local Area Banks and Regional Rural Banks) All-India Financial Institutions Non-Banking Financial Companies (including Housing Finance Companies) Which lending arrangements are exempt from the applicabil...
Post a Comment
Read more

Investment in Alternative Investment Funds (AIFs)

Reserve Bank of India (RBI) has issued directions for investment in Alternative Investment Funds (AIFs) which will replace the existing guidelines . To whom shall the directions be applicable? The directions shall be applicable to investments by the following regulated entities (REs) in units of AIF Schemes – Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks) Primary (Urban) Co-operative Banks / State Co-operative Banks / Central Co-operative Banks All-India Financial Institutions Non-Banking Financial Companies (including Housing Finance Companies) What shall be the limits for investment in AIF schemes? No RE shall individually contribute more than 10% of the corpus of an AIF Scheme. Collective contribution by all REs in any AIF Scheme shall not be more than 20% of the corpus of that scheme. Outstanding investments or commitments of a RE, made with prior approval from RBI under the provisions of Master Direction – Reserve Bank of India (Financi...
Post a Comment
Read more