RBI Pushes Banks to Address Inoperative Accounts Urgently

The RBI has issued a directive to banks to reduce the number of inoperative or frozen accounts. An RBI analysis found high numbers of such accounts, causing concern. Banks are urged to improve KYC processes, take empathetic views in specific cases, and report progress quarterly.

The Reserve Bank of India (RBI) has urged banks to take immediate steps to decrease the number of inoperative or frozen accounts and to submit quarterly reports on their progress. This directive comes amid growing concerns about the large sums of money lying idle in these accounts.

A recent RBI analysis revealed that several banks have a disproportionately high number of inoperative or unclaimed deposits relative to their total deposits. The central bank emphasized the need for banks to streamline the activation process for such accounts to make it hassle-free.

Banks are advised to facilitate smoother KYC updates via mobile banking, internet banking, and non-home branches. The RBI also encouraged banks to organize special campaigns to re-activate these accounts and facilitate Aadhaar updates through designated branches.

(With inputs from agencies.)