Sunday, May 26, 2013

Bank Savings Account: What happens when it is inactive

This is a query that I get a lot from frustrated bank customers. Complaints range from "I have balance in my savings account but suddenly the bank made it inoperative" to "I never took a rupee from my savings account, how dare the bank make it inactive and now I cannot take a single paisa from it?"

Lets go through some basic facts relating to bank savings accounts and the laws that concern them:

1.As per RBI guidelines for both current and savings accounts, these are treated as inoperative if no transaction is conducted in a span of two years. In such cases, cheque book request, address change or ATM debit/credit card renewal will not be facilitated or activated by the bank.

2. Suppose a customer changed location, that will not make his savings account inoperative per se. All he needs to do is to contact his bank, provide the account details of his new bank account and get the balance transferred. The typical practice is to make sure that due diligence is conducted by the bank before facilitating the needful.

3. Even after a savings account turns inoperative, the interest will be credited to the said account on a regular basis. 

4. To start with, you have to act swiftly, write to the bank and ask for a written response as to why your savings bank account has been rendered inactive. The earlier you initiate the communication process, the better it is to build your case.


SG said...

Thanks for the excellent suggestion. I have an account with an Indian Bank branch in Chennai with "substantial" amount in my savings account. Never had any transaction for the past 4 years. Will contact them right away. Thanks.

SG said...

Thanks. I have an account in Chennai which I have not used for more than 5 years. Will contact them right away.

Sanand said...

@SG Yes, do write to the bank at once. Nowadays a lot of banking related issues can be tackled directly by proactive customer communication esp as they can directly file their bank-related complaints to the state's Banking Ombudsman. All of this can also be done online. But to begin with, do write in to the bank. Glad that you found this post useful. Cheers!