What should you do if your Bank account got Freezed? | steps for reactivating bank account
Everyone of us wants to achieve economical growth and and in part of that a bank savings account is essential for that. However, often we heard that bank account got freezed. If so even if you have crore rupees in your bank account you can't even take a single penny out of it.
What is inactive and dormant bank account?
If there have been no transactions in your savings or current bank account, credit or debit other than interest payments credited by your bank or debiting of service charges, for more than 12 months, the account becomes inactive. And if the period exceeds 24 months the account is declared dormant or inoperative.
Do all banks have to stipulate the same time period
for classification of an account as dormant?
If interest on a term deposit with the bank is credited to the account
will the account
remain operative?
Will a bank continue
to pay interest on the balance
in a dormant
savings bank account?
Is the bank required
to inform the customer about his account becoming dormant?
Can a customer issue a cheque on a dormant account?
What does an account holder stand to lose when his account
has been classified as dormant?
Does a bank levy a charge on a dormant account?
Is it necessary for the account holder to visit the branch
to activate the dormant
account?
Is it necessary for the joint account holder(s) also to accompany
the account holder for reactivation of the account?
What is the procedure
for reactivating a dormant account?
Does a bank levy a charge for reactivation of dormant accounts?
What is inactive and dormant bank account?
If there have been no transactions in your savings or current bank account, credit or debit other than interest payments credited by your bank or debiting of service charges, for more than 12 months, the account becomes inactive. And if the period exceeds 24 months the account is declared dormant or inoperative.
Partial Freezing if KYC not submitted
Customers who have not complied with KYC (know your customer) requirements despite repeated reminders may face trouble as the Reserve Bank of India (RBI) has asked banks to partially freeze and subsequently close such accounts
Minimum Balance violation
Many savings accounts often charge you a minimum balance violation charges. If the account is not operated after certain time if sufficient balance is not available then it may lead to clean sweep your account.
That is if the minimum balance required is Rs.1000/- and you have that in your account and left the account inoperative for an year and forgot it. Then after an year the bank will charge ATM renewal fee of Rs.114.50 then the balance may comes to Rs.885.50/- from Rs.1000/- then minimum balance charges will come after certain period this full amount will go in vein.
Reactivating a bank account
Bank account holder should write an application to the bank to renew it. You need to submit your Residential Address proof and ID proof to get it reactivated.
There is no charge for account updation. Perhaps if the account owner died means, the nominee or legal hiers should submit the relevant forms to the bank to get it settled.
FAQs
What are dormant / inoperative accounts?
A savings
as well as a current
account is classified as ‘inoperative’ or ‘dormant’ if there are no transactions in the account for over a period of two years.
Interest credited
by the bank on the balance in the account and any charges
debited by the bank is not considered as transactions for this purpose.
Do all banks have to stipulate the same time period
for classification of an account as dormant?
Yes, because RBI has stipulated that a savings / current account will be classified
as dormant / inoperative if there are no transactions in the account for over a period of two years.
If interest on a term deposit with the bank is credited to the account
will the account
remain operative?
Yes. The account will be treated
as operative because such credit is as per the mandate
of the customer. Similarly, any ECS credits e.g. dividends or ECS debits
e.g. payment of utility bills keep an account operative. Also, if a customer has two accounts he can mandate a single debit from one account
for credit to his other account and keep both accounts
operative.
Will a bank continue
to pay interest on the balance
in a dormant
savings bank account?
Yes. Interest on the balance will be credited to the account
regularly even if it is dormant.
Is the bank required
to inform the customer about his account becoming dormant?
Yes. This happens in two stages:
First Stage: The bank is required to review
annually all Savings
Bank / Current accounts and if there have been no “transactions”, the bank is required
to inform the
account holder to activate the account by putting through
any single debit or credit transaction which can also be put through
by a third party.
Second Stage: If the account is not activated
in the second year also then the bank is required to inform the customer three months prior to the account being classified as dormant.
Can a customer issue a cheque on a dormant account?
Yes. However, the bank will have to exercise due diligence
as to the genuineness of the transaction, verification of the signature, identify, etc. and use its discretion while making
payment.
What does an account holder stand to lose when his account
has been classified as dormant?
The account holder will have to pay charges
– which could be high – and he will not be able
to put through any transaction through ATM, Internet banking or Phone banking as the bank would deactivate such services in the interests
of the bank and the account holder.
Does a bank levy a charge on a dormant account?
Yes. As mentioned
above, the bank does levy a charge on dormant
accounts. The charges ought to be available
in the Tariff Schedule which is displayed
on the bank’s website
and available for perusal at the branch.
Is it necessary for the account holder to visit the branch
to activate the dormant
account?
No. However, since dormant accounts are risk-prone, if the account holder visits
the branch it will facilitate the process of reactivation.
Is it necessary for the joint account holder(s) also to accompany
the account holder for reactivation of the account?
1.
If the account is operated jointly, the application for reactivation would have to be made jointly.
2.
If the account is operated
on an ‘either or survivor’
basis, the application for reactivation can be made by any one of the account holders.
What is the procedure
for reactivating a dormant account?
The account holder should submit a letter to the Bank in person,
along with the pass book for Savings Bank / Cheque book for Current Account,
with the request
to change
the status of the account
from ‘Dormant to Active’
indicating the reasons
for not operating the account
in the past. The account
holder should also submit the following documents / records to the Bank for verification.
·
Recent colour passport size photo – 2 copies
·
Copy of valid photo ID document
·
Copy of valid address proof documents
We will not levy any charge for activation of inoperative account
Does a bank levy a charge for reactivation of dormant accounts?
No. Banks are not supposed to charge for reactivation of dormant accounts.
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