Complete Process to Activate Inoperative Account in Banks

In today’s fast-paced world, many individuals maintain multiple bank accounts for different purposes—salary, savings, investments, or business transactions. However, when a bank account remains inactive for a long time, it often turns into an activate inoperative account. An inoperative account can cause inconvenience, especially when you suddenly need access to your funds or wish to use the account for transactions.

This article explains in detail what an inoperative account is, why it happens, and the complete process to activate an inoperative account in banks.

What is an Inoperative Account?

According to the Reserve Bank of India (RBI) guidelines, a savings or current account is classified as inoperative or dormant if there are no customer-initiated transactions (such as deposits, withdrawals, fund transfers, or cheque issuances) for a period of two consecutive years.

Key Points:

• Interest credited by the bank on savings deposits is not considered as customer-initiated activity.

• Accounts with automatic transactions like ECS (Electronic Clearing Service) or standing instructions may still remain active.

• Dormant or inoperative accounts do not attract penalties, but the account holder cannot freely operate them until reactivation.

Why Do Bank Accounts Become Inoperative?

There are several reasons why bank accounts become dormant:

1. Multiple Accounts – People often forget to use secondary accounts while primarily using one main account.

2. Job Changes/Relocation – Salary accounts from old employers remain unused.

3. Change in Banking Habits – With digital wallets, UPI, and online banking, some accounts remain untouched.

4. Lack of Awareness – Account holders may not know that long inactivity leads to inoperative status.

5. Overseas Stay – NRIs or individuals living abroad may forget to use their domestic accounts.

Why is it Important to Activate Inoperative Accounts?

Reactivating dormant accounts is crucial for several reasons:

• Access to Funds: The money remains yours, but you cannot withdraw or transfer it until activation.

• Avoid Misuse: Dormant accounts are more prone to fraud and identity misuse if left unattended.

• Maintain Creditworthiness: In some cases, linked services like loans or overdrafts can be affected.

• Ease of Future Transactions: An active account ensures smoother investment, bill payment, and financial planning.

• Compliance with KYC Norms: Updating KYC while activating ensures your account meets RBI regulations.

Complete Process to Activate Inoperative Account in Banks

The process to reactivate an inoperative account is simple but requires compliance with KYC (Know Your Customer) norms. Here’s a step-by-step guide:

1. Visit the Bank Branch

• The account holder must visit the home branch where the account is maintained.

• Online activation is generally not allowed due to KYC verification requirements.

2. Submit a Written Application

• Write a formal application to the bank requesting reactivation of the dormant account.

• The application must include your account details, reason for inactivity, and request for reactivation.

3. Provide KYC Documents

• Banks require fresh KYC documents to reactivate dormant accounts. Typically, you must submit:

  • Identity proof (Aadhaar card, PAN card, Passport, Voter ID, Driving License)

  • Address proof (Utility bill, Aadhaar, Passport, Rent agreement, etc.)

  • Recent passport-size photographs

• For NRI accounts, additional documents such as overseas address proof or a visa/residency card may be required.

4. Perform a Small Transaction

• Once KYC verification is complete, the bank may ask you to perform a small transaction (deposit/withdrawal/transfer).

• This transaction marks the account as active again.

5. Bank’s Internal Verification

• The bank processes the request and reactivates the account after internal checks.

• The timeline varies by bank but generally takes 2–5 working days.

6. Receive Confirmation

• Once reactivated, the bank informs you via SMS, email, or official communication.

• You can then freely use your account for transactions.

RBI Guidelines on Inoperative Accounts

The Reserve Bank of India has issued clear instructions to banks:

• Banks cannot levy charges for the period during which the account was dormant.

• Banks must make efforts to contact customers before classifying accounts as inoperative.

• Any amount in an inoperative account remains safe, and the account holder has full rights to claim it anytime.

• Reactivation must follow strict KYC compliance to prevent fraudulent activities.

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Tips to Avoid Accounts Becoming Inoperative

1. Use All Your Accounts Periodically – Make at least one small transaction every year.

2. Link Accounts to Digital Platforms – Enable UPI, net banking, or mobile banking for convenience.

3. Update Contact Details – Ensure the bank has your current phone number and email for alerts.

4. Close Unnecessary Accounts – If you no longer use an account, close it officially to avoid confusion.

5. Set Reminders – Mark a calendar reminder to use secondary accounts at least once a year.

Common Challenges in Activation

• Missing Documents – Lack of valid KYC documents can delay the process.

• NRI Customers – Additional documentation and attestation may be required.

• Old Accounts – In case of very old dormant accounts, records may need extra verification.

• Joint Accounts – All account holders may need to be present for reactivation.

Conclusion

An inoperative bank account is not a loss of funds but a temporary restriction on operations due to inactivity. By following the complete process—application, KYC submission, and a small transaction—you can reactivate your dormant account easily.

To avoid future inconvenience, ensure regular usage of all your bank accounts, even if it is just a small deposit or withdrawal once in a while. Staying proactive helps in smooth financial management, prevents risks of fraud, and ensures your funds remain accessible when needed.

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