RBI: There have been significant modifications to the minimum balance in accounts by the Reserve Bank of India. You will not be charged a minimum balance charge if you do not use a bank account. The RBI stated that banks are not allowed to penalise customers for inactive accounts for not keeping the required minimum balance. This covers accounts for which there hasn’t been a transaction in over two years. The new regulation will take effect on April 1st.
Protection of Direct Benefit Transfer and Scholarship Accounts
The RBI further stated that banks are unable to declare accounts opened for direct benefit transfers or scholarships as inactive. even in cases when these accounts haven’t been used in over two years. An RBI circular about inactive accounts has been released. via which the banks have received instructions.
In its circular, the RBI stated that the goal of these directives was to lower the quantity of unclaimed deposits in the banking system and give such funds back to the legitimate owners.
Notification of Account Closure
The RBI’s new regulations require banks to notify consumers via SMS, letter, or mail when their accounts are being closed. Additionally, banks have been instructed to get in touch with the account holder’s nominee or the person who introduced them if the owner of an inactive account does not reply, according to this circular.
Penalty Prohibition for Inactive Accounts
As per the latest RBI circular, banks are prohibited from levying penalties for failing to maintain a minimum balance in accounts that have been deactivated. The rule states that there will be no fees associated with reactivating deactivated accounts.
The most recent report from the RBI states that by March 2023, the amount of unclaimed deposits had increased by 28% to Rs 42272 crore. The amount of deposit accounts that have not been used for a decade or longer will be transferred by banks to the RBI’s Depositor and Education Awareness Fund.
Negative Balance Prevention
Prior to this, the RBI had instructed the banks to make sure that the accounts’ balances did not go negative as a result of penalties for not keeping the requisite amount. Numerous banks still levy penalties even now.
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