A couple of months back the RBI had issued detailed guidelines on inoperative or dormant bank accounts – savings as well as current account. It had stated that if there are no transactions in the account for a period over two years, it is to be treated as dormant. Further, for the purpose of classifying an account as inoperative, both the types of transactions i.e., debit as well as credit transactions induced at the instance of customers as well as third party should be considered.

RBI now states that there may be instances where the customer has given a mandate for crediting the interest on Fixed Deposit account to the Savings Bank account and there are no other operations in the Savings Bank account. Some doubts have arisen whether such an account is to be treated as inoperative account after two years.

In this connection, the Banker of the Banks has clarified that since the interest on Fixed Deposit account is credited to the Savings Bank accounts as per the mandate of the customer, the same should be treated as a customer induced transaction. As such, the account should be treated as operative account as long as the interest on Fixed Deposit account is credited to the Savings Bank account. The Savings Bank account can be treated as inoperative account only after two years from the date of the last credit entry of the interest on Fixed Deposit account.

Inoperative Accounts