Bank Account cannot be classified as Inoperative if Dividend been credited to such account

inoperative bank account in INDIARBI had clar­i­fied vide cir­cu­lar RBI /2014–15/200 DBOD.No. Leg. BC. 36/09.07.005/2014–15 dat­ed Sep­tem­ber 1, 2014 that Bank Account can­not be clas­si­fied as Inop­er­a­tive if Div­i­dend of his/ her shares been cred­it­ed to such account

Please refer to para­graph 2(iv) of our Cir­cu­lar DBOD.No.Leg.BC.34/09.07.005/2008–09 dat­ed August 22, 2008 on Unclaimed Deposits/Inoperative Accounts in Banks in terms of which a sav­ings as well as cur­rent account should be treat­ed as inoperative/dormant if there are no trans­ac­tions in the account for over a peri­od of two years. Fur­ther, in terms of para­graph 2(vi), for the pur­pose of clas­si­fy­ing an account as inop­er­a­tive, both the types of trans­ac­tions i.e. deb­it as well as cred­it trans­ac­tions induced at the instance of cus­tomers as well as third par­ty should be considered.

2. There may be instances where the cus­tomer has giv­en a man­date for cred­it­ing div­i­dend on shares to Sav­ings Bank account and there are no oth­er oper­a­tions in the Sav­ings Bank account. Some doubts have arisen whether such an account is to be treat­ed as inop­er­a­tive account after two years.

3. In this con­nec­tion, we clar­i­fy that since div­i­dend on shares is cred­it­ed to Sav­ings Bank accounts as per the man­date of the cus­tomer, the same should be treat­ed as a cus­tomer induced trans­ac­tion. As such, the account should be treat­ed as oper­a­tive account as long as the div­i­dend is cred­it­ed to the Sav­ings Bank account. The Sav­ings Bank account can be treat­ed as inop­er­a­tive account only after two years from the date of the last cred­it entry of the div­i­dend, pro­vid­ed there is no oth­er cus­tomer induced transaction.

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