No withdrawal of money from an ATM or a bank branch or through phone banking.Once it becomes dormant, you can expect following additional restrictions: In most cases, you can expect following restrictions on an Inactive accounts: Others won't allow change of address, issue or renewal of a debit card, cheque book requests etc. Some will extend these restrictions to cheque transactions as well. Most banks will impose restrictions on ATM, net-baning and phone-banking transactions. All it does is to advise the banks to exercise due diligence before clearing transactions in these accounts.īecause of this, the restrictions will differ from bank to bank. RBI hasn't clearly defined the restrictions to be placed on dormant or inactive accounts. What restrictions will you face with dormant accounts? Imagine a scenario where you have left an savings account unattended for a long period of time.Īnd when you revisit it to withdraw your balance, you discover that your balance has been depleted, either because of regular non-maintenance penalties levied by your bank or some fraudulent transactions that you never noticed.Ĭurrently, only savings and current accounts are marked as inactive or dormant while other account types will continue to stay active even after 24 months. RBI advises banks to exercise diligence and bank staff will pay attention if there is a sudden request for a withdrawal from an inactive or a dormant account.įurther, RBI has banned banks from deducting minimum balance penalties from a dormant account, hence providing an additional layer of protection against unintended deductions. The main intent behind this rule is to reduce the risk of fraudulent transactions in what are essentially ignored savings accounts. These include automatic interest payments on your savings balance or penalty deductions or service charges that may be levied from time to time.Įssentially, if there is no self or third party transaction for a period of two years on a trot, your account will be marked as dormant. Any interest credited on fixed deposits with the same bank are considered valid transactions too.Īny transactions that are bank-initiated are not considered valid for the purpose of determining the dormant status of your savings account. Any dividends received or EMIs will be considered as valid transactions. Some examples are withdrawal of cash, payment through cheque or internet banking, use of phone banking or ATMs etc.

The transactions that are considered valid are customer or third party initiated and include both debit and credit transactions.

If you don't do any transaction for further 12 months, it will become Dormant.Įffectively, a savings account is considered dormant after 24 months of inactivity where no valid transactions happen. If you haven't done any transactions in your account for 12 months, it will be classified as an Inactive. How and Why does a bank account become dormant?

Bank dormant account policy