RBI asks banks to be cautious on inoperative account payments

The Reserve Bank has asked banks to exer­cise cau­tion before mak­ing pay­ments to cus­tomers claim­ing funds lying idle in inop­er­a­tive accounts.

Banks are advised to invari­ably ver­i­fy the gen­uine­ness of the trans­ac­tions and ensure that the amounts paid to the cus­tomers are prop­er­ly audit­ed by the inter­nal audi­tors / statu­to­ry audi­tors.  It also asked banks to car­ry out prop­er due dili­gence in accor­dance with risk cat­e­go­ry of the cus­tomers before mak­ing any such payments.

The RBI direc­tive came in the wake of ris­ing cas­es where banks claimed sub­stan­tial refunds from the Depos­i­tor Edu­ca­tion and Aware­ness Fund, soon after trans­fer­ring the amounts in the fund.  RBI said it was not clear as to how the cus­tomers or claimants, who did not oper­ate the account for ten years or more, approached the banks for repay­ment imme­di­ate­ly after the bal­ances in their inop­er­a­tive accounts were trans­ferred to the fund.

“Banks should, there­fore, fol­low all instruc­tions metic­u­lous­ly in respect of inop­er­a­tive accounts,” RBI said. As per the RBI direc­tive, banks have been advised to car­ry out spe­cial efforts to trace the cus­tomers in respect of inop­er­a­tive accounts.

As per the RBI guide­lines, banks are required to pay back the amounts lay­ing in inop­er­a­tive accounts for ten years or more, along with inter­est. They lat­er can lodge a claim for refund from the Depos­i­tor Edu­ca­tion and Aware­ness Fund for an equiv­a­lent amount paid to the customer/depositor.