The Reserve Bank of India (RBI) has decided to close some bank accounts from January 1, 2025. This step has been taken to enhance the security of the banking system, reduce fraud and improve the overall efficiency of banking operations. Three types of bank accounts will be affected by this new rule – dormant accounts, inactive accounts and zero balance accounts.
This move may affect millions of bank account holders. Therefore, it is very important to know whether your account is safe or not, and if not, what steps can be taken to avoid account closure. This decision of RBI has been taken to ensure the security of both customers and the banking system.
New rules of RBI: Three types of bank accounts will be closed
Under this new rule of RBI, three types of bank accounts will be closed from January 1, 2025. Let us know about these accounts in detail:
| account type | Description |
| Dormant Accounts | No transaction for 2 years or more |
| inactive accounts | No transactions for the last 12 months or more |
| zero balance accounts | Zero balance in account for a long time |
| Reason for closing account | Increasing Security, Reducing Fraud |
| effective date | January 1, 2025 |
| those affected | millions of bank account holders |
| Objective of RBI | Improving the security and efficiency of the banking system |
Dormant Accounts
Dormant accounts are accounts in which there have been no transactions for two consecutive years or more. According to RBI, such accounts become easy targets for hackers and fraudsters. Therefore, for the safety of customers and the banking system, it has been decided to close these accounts.
If your account falls in the dormant category, you should immediately contact your bank and take necessary steps to reactivate the account. For this, you will have to go to your bank branch, get your KYC updated and do some transactions in the account.
Inactive Accounts
Inactive accounts are accounts that have not had any transactions for the last 12 months or more. RBI believes that such accounts also increase the risk of fraud. Therefore, it has been decided to close these accounts also.
If your account falls in the inactive category, you should contact your bank as soon as possible and take necessary steps to reactivate the account. For this you will have to do at least one transaction in the account.
Zero Balance Accounts
Zero balance accounts are those accounts which have no balance for a long period of time. RBI believes that such accounts can be misused and may increase financial risks. Therefore, it has been decided to close these accounts also.
If your account falls in the zero balance category, you should contact your bank as soon as possible and deposit some amount in the account. Along with this you should get your KYC updated.
What to do to avoid account closure?
If your account falls into any of the three categories above, you should take immediate action. Here are some important tips:
- Contact the bank: Visit the nearest branch of your bank or call the customer care number of the bank.
- Update KYC: Get your account’s KYC updated. For this you will have to submit proof of your identity and address.
- Make a Transaction: Make at least one transaction in your account. It can be either debit or credit.
- Maintain Minimum Balance: Always maintain minimum balance in your account.
- Check account regularly: Check your account regularly and make transactions at least once every three months.
Effect of this new rule of RBI
This new rule of RBI will impact the banking system in many ways:
- Increased security: This move is expected to reduce banking frauds.
- Operational Efficiency: Banks will have to spend less time and resources managing dormant accounts.
- KYC Compliance: This will make it easier for banks to comply with KYC rules.
- Customer Awareness: This step will encourage customers to be more vigilant about their accounts.
Important tips for bank account holders
If you don’t want your bank account to be closed, follow these tips:
- Regular Transactions: Make regular transactions in your account, even if it is of small amount.
- Using Online Banking: Keep your account active using Online Banking or Mobile Banking.
- Standing Instructions: Set up standing instructions for regular payments from your account.
- Set up alerts: Avail SMS or email alert service from your bank.
- Multiple Accounts: If you have multiple bank accounts, consider consolidating them.
Purpose of RBI’s new rule
This new rule of RBI serves several purposes:
- Preventing fraud: Inactive accounts are often used for fraud. RBI wants to reduce this risk by closing these accounts.
- Efficiency of Banking System: Management of inoperative accounts consumes a lot of banks’ resources. By closing these accounts banks will be able to make better use of their resources.
- KYC Compliance: This move will make it easier for banks to keep their customer information up-to-date.
- Customer Awareness: This rule will encourage customers to be more vigilant about their bank accounts.
Disadvantages of closing bank account
If your bank account is closed, you may face many problems:
- Disruption in financial transactions: You will not be able to make your regular payments.
- Impact on credit score: Account closure can have a negative impact on your credit score.
- Difficulty in opening a new account: There may be a problem in opening a new bank account due to a closed account.
- Disruption in government benefits: If you avail the benefits of government schemes, closure of your account may hamper them.
Disclaimer
This information is given on the basis of information available till January 2, 2025. Although RBI has announced this rule, there may be some changes in its implementation. Therefore it is advised that you contact your bank to confirm your account status and take necessary steps. This rule is de facto and implemented by RBI to increase the security and efficiency of the banking system.
