In a move to tighten banking security and improve system efficiency, banks across India will begin closing long-unused accounts from February 1, 2026, under revised directions issued by the RBI.
The new rules apply to all banks nationwide and cover 3 main types of accounts. These include dormant zero-balance accounts with no activity for years, inactive Jan Dhan accounts opened under financial inclusion schemes but left unused, and unclaimed deposit accounts that have remained untouched for over 10 years. In the case of unclaimed deposits, balances will be transferred to the RBI’s Depositor Education and Awareness (DEA) Fund.
The objective behind this step is to reduce the risk of fraud and misuse. Dormant accounts are often linked to money laundering and financial scams. Closing such accounts will also lower the administrative burden on banks and help improve digital banking systems. Another goal is customer protection, as unclaimed funds moved to the DEA Fund remain safeguarded until claimed by the rightful owner.
Account holders are advised to take timely action. Customers should check their accounts through net banking or by visiting their bank branch. Dormant accounts can usually be reactivated with a simple transaction such as a deposit or withdrawal. Updating KYC details is also important to avoid being marked inactive. Those who believe they have unclaimed deposits should approach their bank before the funds are transferred to the DEA Fund.
Failure to act may lead to permanent account closure. Reopening such accounts could require a fresh application. Customers may also lose access to linked services such as debit cards and auto-pay mandates. Once funds move to the DEA Fund, a formal claim process will be needed to recover them.
Customers should review all accounts, especially older savings and Jan Dhan accounts. At least 1 transaction must be completed before January 31, 2026, to keep them active. Any suspected unclaimed deposits should be reported to the bank without delay.
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