New Delhi. In the banking sector, the customer's account needs to remain active. If there is no transaction in a savings or current account for a long time, it is declared an inactive or 'dormant' account. According to the guidelines issued by the Reserve Bank of India (RBI), it is mandatory for banks to properly manage such accounts. Along with this, customers also have the right to get their deposited money.

If there is no transaction in a savings or current account for more than two years, then that account is considered an 'inactive' or 'dormant' account. Banks have to keep such inactive accounts in a separate register so that they can be managed properly.

What are unclaimed deposits?
Accounts that have no transactions for 10 years or fixed deposits that mature after 10 years and remain unclaimed are considered as 'unclaimed deposits'. This money is transferred to the RBI's 'Depositor Education and Awareness' (DEA) fund. However, customers have the right to demand their deposited money back from the bank, along with any interest applicable, if any.

Does a dormant account earn interest?
As per RBI rules, interest will continue to be paid on a savings account whether the account is active or dormant. If a fixed deposit is not withdrawn after maturity, interest will be paid on it at the savings account rate.

How to reactivate the account?
If your account has been deactivated, the following process can be followed to reactivate it:

• The customer will have to visit the bank branch with his new KYC documents.
• A formal request will have to be given to the concerned branch of the bank.
• The account will be reactivated after verification of KYC documents by the branch.
• The customer will be notified by SMS or email once the account is activated.
• This work is completed within 3 days.