The Reserve Bank of India (RBI) has introduced several new rules starting January 1, 2025, aimed at strengthening banking security, preventing fraud, and making transactions more convenient. It is crucial to understand these changes and how they may impact your bank account.
Changes in Dormant Account Regulations
Under the new RBI guidelines, any bank account that has not been used for transactions for over two years will be classified as dormant. Dormant accounts are more susceptible to fraud as they can be targeted by cybercriminals. To safeguard customers, RBI has mandated the closure of such accounts.
How to Keep Your Account Active
If your account has been inactive for a prolonged period, visit your bank to conduct a transaction or update your KYC details to reactivate it. Keeping your account active ensures the safety of your funds.
Definition and Risks of Dormant Accounts
Accounts without transactions for over a year are considered dormant under the new RBI rules. Such accounts increase banks’ administrative workload and pose a higher risk of online fraud.
To prevent complications, you should visit your bank branch and submit the necessary documents to reactivate your account.
Restrictions on Zero Balance Accounts
RBI has also imposed restrictions on zero balance accounts that have remained unused for a long time. These accounts are at risk of being misused and create difficulties in maintaining KYC compliance.
If you own a zero balance account with no activity, consider depositing funds into it or closing it to avoid future banking issues.
Revised Fixed Deposit Rules
RBI has updated its fixed deposit regulations for non-banking financial companies (NBFCs) and housing finance firms. Key changes include:
- Deposits below ₹10,000 will not earn interest if withdrawn within three months.
- In cases of serious illness, even complete withdrawals within three months will not accrue interest.
- Individual depositors can withdraw up to 50% of their deposit (up to ₹5 lakh) within three months, but no interest will be paid.
- NBFCs must now notify depositors about maturity 14 days in advance instead of the previous two-month notice period. This provides depositors with a shorter window to make financial decisions.
Increased UPI Transaction Limit
A significant update is the increase in the UPI 123Pay transaction limit from ₹5,000 to ₹10,000. This change, introduced by the National Payments Corporation of India (NPCI), benefits individuals using feature phones or limited internet access, promoting greater adoption of digital transactions.
New Guidelines for Inoperative Accounts
RBI has also implemented fresh guidelines for inoperative accounts and unclaimed deposits. If an account has had no customer-initiated transactions for over two years, it will be classified as inoperative.
Annual Review of Inactive Accounts
- Banks must review accounts with no transactions for more than a year.
- Government and scholarship-related accounts are exempt to prevent disruptions in public payments.
- To enhance security, banks will conduct routine audits of inoperative accounts.
- Banks are required to provide clear information about reactivating inactive accounts on their websites and at branches.
What You Should Do Next
With these new rules in effect, it is essential to take proactive measures:
- Conduct regular transactions to keep your account active.
- Ensure your KYC details are updated.
- Maintain a minimum balance in your account to avoid deactivation.
By following these simple steps, you can protect your money and contribute to a more secure banking system.
For more details about these regulations, contact your bank or visit the official RBI website.
Disclaimer
The information in this article is for general awareness only. The details provided are based on RBI’s latest rules and guidelines. Before making any banking-related decisions, consult your bank or refer to the official RBI website.
