Inactive Bank Accounts Hold ₹1 Lakh Crore: RBI Plans Measures to Curb Fraud
RBI Expresses Concern Over Inactive Bank Accounts Holding ₹1 Lakh Crore
The Reserve Bank of India (RBI) has raised concerns about the growing number of frozen and inactive bank accounts across the nation. Banks have been directed to take immediate steps to reduce such accounts. Measures like simplified KYC processes through mobile or internet banking and video-based customer identification are recommended. Additionally, ensuring uninterrupted deposit of funds from government schemes into these accounts has been emphasized.
What Are Inactive Bank Accounts?
An account with no transactions for over two years is classified as inactive. These accounts pose risks of fraud and identity theft, necessitating stricter monitoring.
Key Statistics on Inactive Accounts
- Unclaimed Deposits Surge: By March 2023, unclaimed deposits reached ₹42,270 crore, up 28% from ₹32,934 crore in March 2022.
- Frozen Funds: Inactive accounts collectively hold over ₹1 lakh crore.
Why Is RBI Issuing Guidelines on Inactive Accounts?
Inactive accounts increase the risk of fraudulent activities. To address this, RBI has instructed banks to monitor:
- Reactivated accounts for six months.
- Accounts inactive for a year or more.
How Inactive Accounts Encourage Fraud
According to experts, inactive accounts are prime targets for fraudsters. These accounts may be exploited for unauthorized transactions, identity theft, or illegal transfers.
Steps to Reactivate an Inactive Account
Reactivating an account is free and simple:
- Visit the Bank Branch: Submit a signed KYC form along with self-attested identity and address proof.
- Make a Transaction: Deposit a minimum amount, such as ₹100, to reactivate the account.
RBI’s Approach to Unclaimed Deposits
Unclaimed funds are transferred to the Depositor Education and Awareness Fund managed by RBI. These funds are utilized for customer education and awareness campaigns.
The Role of Jan Dhan Accounts
Approximately 20% of Jan Dhan accounts were inactive by December 2023. Of the 51 crore accounts, nearly 10.3 crore accounts showed no activity, raising concerns over financial inclusion.
Protect Your Account and Funds
Maintaining active status for bank accounts ensures secure access to funds and services, avoiding penalties like maintenance or inactivity fees.
