If your savings or current account hasn’t witnessed any transactions(credit/debit except interest credited the bank, deduction of service charges, for more than 1 year, the account is rendered inoperative. On exceeding 2 years, the account is declared dormant.

Under The Depositor Education and Awareness Fund Scheme, 2014 - Section 26A of Banking Regulation Act, 1949-the amount to the credit of any account in India with any bank which has not been operated upon for a period of ten years or any deposit or any amount remaining unclaimed for more than ten years shall be credited to the Fund, within a period of three months from the expiry of the said period of ten years.

Any customer induced transaction is enough for this purpose. Like credit or debit transactions done by the account holder in this account, keeps it active. Some of them have been listed below -

Outward bill/Inward bill/Deposit of cash/Deposit through cheque/Cash withdrawal or deposit via ATM./Internet banking transaction/Crediting interest earned mandate on Fixed deposit to Savings Bank Account. Dividend on shares is credited to Savings Bank accounts as per the mandate of the customer, the same will be treated as a customer induced transaction. As such, the account will be treated as operative account as long as the dividend is credited to the Savings Bank account.

The bank takes this step of making your saving bank account inoperative to ensure security and protecting your money from the risk of fraudulent transactions. this is for both internal employees and external customers. Once an account is not used for a long time since years, chances of bank employees easily getting sample of the account holder’s past signatures. With this it becomes extremely easy for them to access the deposited money by using withdrawal slips. Hence, to save your account from such frauds, banks group it into a single cluster and maintain details of inoperative accounts in a separate ledger.

Keep using your account before it turns inoperative or dormant. Carry out a transaction, withdraw cash, transfer funds through any of the banking channels, or make a cheque payment to ensure that your account remains active. Carry out a transaction once in a while. If you have shifted cities, you can use net banking to transfer small sums between two accounts. If the account is no longer useful, best is to close it.

No. Freezing of a bank account means there will be no transaction in that account until further notice. No money can be debited from the account from the specified date. All payments will be stopped even in case of cheques issued earlier by the account holder. However, any deposit already in the pipeline can be credited. Regulators or courts have rights to order a freeze on bank accounts. You have to have a favourable court verdict in order to unfreeze and secure your bank account.

Once an account turns inoperative or dormant, you can’t perform several operations. In case of an inoperative account, you cannot request that a chequebook be issued. Once an account turns dormant, the number of restrictions increases even further. You can’t request that a chequebook be issued, the address be changed, the signature be modified, a joint holder be added or deleted, or an ATM/debit card be renewed. You will also not be able to withdraw money from an ATM or carry out any transaction either through Internet banking or a branch of the bank.

However, even after your account turns inoperative or dormant, interest is still credited to your saving account regularly.

Normally, the bank will intimate the customer two to three months prior to the account becoming inoperative. If you still don’t take any action, the bank will notify you declaring the account dormant.

For reactivation of an inoperative/dormant account you require to submit a letter to the bank justifying the reason for your absence. The Bank will observe due diligence when it comes to verifying customer credentials before reactivating your account. The account holder needs to be physically present themselves with a valid address proof and valid identity proof. The customer would be required to take these to the nearest branch, to duly fulfil the Know Your Customer (KYC) formalities.

As per RBI guidelines, charges for activating dormant account cannot be levied