Big news for bank customers. The rules for account deactivation in banks might be altered. In this context, the largest government bank in the country has also proposed to the RBI to modify the regulations. To address the issue of maintaining an active account, the State Bank of India (SBI) has contacted the Reserve Bank of India (RBI) asking for a modification of the rules to include non-financial transactions like balance inquiries for the account to be deemed active.
SBI Chairman C S Shetty mentioned that frequently, account holders, particularly those who established accounts to obtain financial aid through government programs, engage in a restricted number of transactions.
CS Shetty mentioned that once the money is deposited into the account, it is only withdrawn two to three times before it becomes inactive and is subsequently declared inactive.
What is the process for activating the account?
He mentioned that the account may also be activated via non-financial transactions. We have addressed the issue with the Reserve Bank of India (RBI). The SBI chairman stated that the current regulations emphasize financial activities over time, causing many accounts to be labeled as “inoperative.” He stated that when a customer performs a non-financial transaction, it signifies that he recognizes the bank account, thus it is designated as an active account.
What constitutes an inactive account?
An inactive or deactivated account indicates that no further actions can be performed with that account. When the account becomes inactive, the account holder is unable to withdraw funds from it or deposit money into it. If an account remains unused for an extended period and no money is added, the bank will deactivate that account.