RBI issues new rules for activating inoperative bank accounts, unclaimed deposits: KYC via video, any branch of bank, business correspondent

The Reserve Bank of India (RBI) has issued fresh guidelines to make it easier for bank customers to reactivate their long-inactive accounts and claim unclaimed deposits. The new updated guidelines, which go into effect immediately, provide more flexibility by allowing KYC (Know Your Customer) updates via any bank branch, video-based verification, and with the assistance of Business Correspondents (BCs).

According to the RBI notification on June 12, 2025, “A bank shall make available the facility of updation of KYC for activation of inoperative accounts and unclaimed deposits at all branches (including non-home branches). Further, a bank shall endeavour to provide the facility of updation of KYC in such accounts and deposits through Video-Customer Identification Process (V-CIP). The V-CIP related instructions under Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016 (as updated from time to time) shall be adhered to by the bank. Additionally, the services of an authorised Business Correspondent of the bank may be utilized for activation of inoperative accounts as prescribed in paragraph 38(a)(iia) of the above Master Direction.”

What are inoperative accounts and unclaimed deposits?

Bank accounts that haven’t been used or operated for 10 years or more are considered inoperative. Similarly, deposits that remain unclaimed for a decade also fall under this category. As per existing rules, the balance in such accounts is required to be transferred by banks to the Depositor Education and Awareness (DEA) Fund, maintained by the RBI.

What are the new rules on inoperative accounts?

KYC updation at any branch

Banks must now provide the facility to update KYC documents for inoperative accounts and unclaimed deposits at all branches, including non-home branches. This means customers no longer need to travel to the branch where the account was originally opened.

Video KYC option introduced

Additionally, banks are urged to provide the Video-based Customer Identification Process (V-CIP) for KYC updates. This remote facility is especially useful for senior citizens, non-resident Indians, and rural clients because it enables users to finish the verification process from the comfort of their own homes via a video call.

Support via Business Correspondents (BCs)

Banks’ Authorised Business Correspondents (BCs), who frequently work in isolated or underserved areas, can now assist clients with updating their KYC and reactivating their accounts.