Reserve Bank of India (RBI) has unveiled a
Scheme for Facilitating Accelerated Payout – Inoperative Accounts and Unclaimed Deposits, aimed at encouraging banks to take proactive measures in tracing depositors and return funds that are lying dormant. Effective 1 October 2025 and valid through 30 September 2026, the scheme seeks to reduce the stock of idle balances and enhance depositor confidence by ensuring swifter restitution of unclaimed and inoperative account balances.
Under this new scheme, every bank registered under the depositor education & awareness (DEA) fund framework stands eligible to participate. The scheme encompasses inoperative accounts and deposits that have already been transferred to the DEA Fund but remain unsettled.
To incentivise action, RBI has stipulated a differential payout structure, tied to the period of dormancy and amount involved. For accounts that are inactive for up to four years, banks will receive 5% of the amount or Rs5,000 (whichever is less). If the dormancy spans four to eight years, the payout rises to 6% or Rs10,000 (whichever is less). For eight to 10 years, the bank is eligible for an incentive of 7% or Rs15,000 (whichever is less) of the amount.
Finally, accounts dormant for more than 10 years will qualify for 7.5% of the amount or Rs 25,000 (whichever is less).
Banks must submit claims for such payouts on a quarterly basis, within one month of each quarter’s end. Each claim must be authorised by a senior management executive and submitted both via email and in hard copy to the RBI’s DEA Fund department. According to the central bank, valid claims will be processed and settled within 30 days of submission, though they will remain subject to internal audits or inspections under each bank’s compliance framework.
While this scheme marks a fresh push, it builds upon an evolving regulatory framework aimed at tackling unclaimed funds in India’s banking system. In its earlier set of
revised directions issued in January 2024, RBI mandated that banks review accounts which have seen no customer-induced transactions for more than one year, and classify them as inoperative under prescribed rules.
The directions emphasise that only customer-induced transactions should count towards ongoing activity, thereby excluding bank-initiated actions such as standing instructions or auto-renewals. Where such transactions exist, the account must not be labelled inoperative. Banks have also been directed to segregate accounts opened specifically for crediting scholarships or direct benefit transfers (DBT), so that their non-usage does not result in an inoperative classification simply due to the absence of regular transactions.
The 2024 directions further require banks to contact holders of inoperative accounts or unclaimed deposits via letters, email or SMS on a quarterly basis (provided contact information is available). If letters are returned undelivered or there is no response, the bank must initiate tracing efforts—including contacting introducers, nominees or legal heirs.
Banks are also instructed to host on their websites (or at branches, for those without websites) searchable lists of unclaimed deposits transferred to the DEA Fund, allowing the public to search by name and address (excluding PIN codes). These lists must be updated at least monthly.
A centralised portal, UDGAM (Unclaimed Deposits Gateway), has been established by RBI to streamline access to information and aid in recovery. The UDGAM portal is intended to centralise the scattered data and simplify tracing of rightful claimants across banks.
Moreover, the earlier instructions mandate that banks enable know-your-customer (KYC) re-activation of inoperative accounts at any branch (including non-home branches) or via video customer identification process (V-CIP), subject to bank capability, without additional charges. Reactivation must undergo a ‘maker-checker’ process within the core banking system, with appropriate system logs retained for audit purposes. Banks are obligated to notify customers once their inoperative status has been removed, alerting them of remedial options in case of unauthorised access. Notably, savings accounts classified as inoperative must continue to accrue interest and banks may not levy penal charges for non-maintenance of minimum balances during the inoperative period.
By combining the new accelerated payout scheme with existing regulatory mandates, RBI aims to bridge the gap between idle deposits and rightful ownership. The scheme is expected to encourage banks to engage in more systematic tracing, outreach and settlement of claims, thereby reducing the backlog of unclaimed funds that continues to grow even as awareness efforts intensify.
