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What is the difference between inactive accounts and dormant account?

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posted Jun 19 by Ati Kumar

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1 Answer

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Let me informed that If you have a current or a savings bank account and have not done any transactions through it for more than 12 months, then it will be classified as an inactive account. And if you don’t do any transactions from a bank account for 24 months, then it will be classified as dormant. As per Reserve Bank of India (RBI) guidelines, an account becomes dormant if a customer does not initiate transactions such as withdrawal of cash at a branch or automated teller machine (ATM), payment by cheque, transfer of funds through Internet banking, phone banking or ATMs.

System generated transactions, such as interest credit, are not considered valid. However, if you get dividend on shares or the proceeds of your fixed deposit (FD) in your savings account, then it will be considered as a customer induced transaction. Hence, the account will be treated as operative as long as the dividend or FD proceeds is credited to bank account. It will be treated as inoperative only after two years from the date of the last credit entry of dividend or FD, provided there is no other customer induced transaction.

Once your account is tagged as inactive, you won’t be able to request for a debit card or cheque book, use Internet banking or get user identity (ID) and password. And when it becomes a dormant account, besides the restrictions applicable on an inactive account, you won’t be allowed to change your address, contact number, email address, and do transactions through ATMs, Internet and phone banking.

In simple words....

If there are no transactions from last 6 months in a particular bank account it is called inactive account and the same continues for one year it called as dormant account.

answer Jun 20 by Ritika Sharma
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