As the new year begins, several financial changes will take effect, impacting millions of bank accounts across the country. The Reserve Bank of India (RBI) has issued directives to close three specific types of bank accounts starting January 1. This move is expected to affect a significant number of account holders, and the central bank has provided clear instructions on how to handle these accounts. If you hold one of these accounts, it’s important to be aware of the necessary steps to take.
RBI's Decision to Close Certain Bank AccountsThe RBI has decided to close specific types of bank accounts to enhance the overall banking system. This measure aims to improve the safety, transparency, and efficiency of banking transactions, helping to curb fraud and boost digitization. The decision has been made in light of potential cyber threats and risks associated with inactive accounts.
Types of Accounts to be ClosedDefunct Accounts:Accounts that have remained inactive for 2 years or more are classified as dormant or inactive. These accounts are vulnerable to cybercrime, and by closing them, the RBI aims to protect both customers and the banking system from fraud.
Non-Current Accounts:Accounts that have been inactive for the past 12 months or more will also be closed. This decision is made to safeguard such accounts from potential fraud. If your account falls under this category, you can activate it by reaching out to the bank.
Zero Balance Accounts:Accounts with long-term zero balances will be closed to prevent misuse, reduce financial risk, and encourage customers to maintain an active relationship with the bank.
How to Prevent Account ClosureTo keep your account from becoming inactive, it’s important to update your KYC (Know Your Customer) details. If your account is at risk, contact the bank immediately to complete the KYC process. You can also update your KYC online. Additionally, maintaining a minimum balance and keeping transactions active will help ensure your account stays open.