Major Changes in Banking System: RBI to Close Three Types of Accounts from January 1, 2025
The Reserve Bank of India (RBI) has announced significant changes in the banking system, effective from January 1, 2025. These changes are aimed at enhancing transparency, safety, and efficiency in banking operations while reducing the risk of fraud. As part of these reforms, banks will begin closing three specific types of accounts. Customers are urged to check their account status and take necessary steps to avoid account closure.
Here are the three types of accounts that will be closed starting January 1:
Inactive Accounts
Accounts that have shown no transactional activity for over 12 months are categorized as inactive. The RBI has directed banks to close these accounts to minimize operational inefficiencies and reduce the risk of online fraud. Account holders who wish to retain such accounts must visit their respective bank branches and complete the required procedures to reactivate them.
Dormant Accounts
Dormant accounts are those that have been inactive for two years or more. These accounts are considered high-risk as they are often targeted by cybercriminals for fraudulent activities. To enhance security and prevent misuse, the RBI has mandated the closure of all dormant accounts. Customers with dormant accounts are advised to contact their banks and perform a transaction or update their KYC details to avoid account termination.
Zero Balance Accounts
Accounts with a zero balance for an extended period will also be closed under the new guidelines. This step aims to prevent the misuse of such accounts and encourage customers to maintain regular activity in their accounts. Account holders with zero balance accounts are urged to visit their bank branches and ensure proper KYC compliance to keep their accounts operational.
What Customers Should Do
To prevent account closure, customers should:
1. Check Account Status: Verify if their account falls under any of the categories mentioned.
2. Reactivate Inactive/Dormant Accounts: Perform a transaction or update account details at their bank branch.
3. Maintain Minimum Balance: Ensure that their accounts are not left with zero balance for extended periods.
The RBI’s initiative seeks to streamline banking operations while safeguarding customer accounts from potential fraud. Customers are encouraged to act promptly to secure their accounts before the new regulations come into effect.
