Activation of Inoperative Bank Accounts

A bank account becomes part of our financial identity and plays a vital role in managing day-to-day transactions, savings, and long-term investments. However, many people unknowingly end up with inoperative or dormant bank accounts—usually due to prolonged inactivity. If you haven’t used your bank account for a long period, you may be surprised to find it inactive when you try to withdraw money, receive funds, or update your passbook.

The good news is that activating an inoperative bank account is simple, and every bank in India allows customers to reactivate their dormant accounts by following standard procedures. In this article, we will cover what an inoperative account is, why accounts become dormant, documents required for reactivation, the step-by-step activation process, and essential tips to avoid future inactivity.

What Is an Inoperative Bank Account?

A bank account is considered inoperative (or dormant) when there are no customer-initiated transactions for 24 months. Customer-initiated transactions include:

• Cash deposits
• Cash withdrawals
• Online transfers
• Cheque payments
• ATM transactions

Automatic bank transactions like interest credits or penalty deductions do not count as activity.

Once an account becomes inoperative:

• Debit transactions are usually restricted
• ATM/debit card stops working
• Net banking access may be disabled
• Chequebook requests might be denied

However, banks cannot close or take the money in these accounts. The funds remain safe.

Why Do Bank Accounts Become Inoperative?

There are several reasons why accounts become dormant:

1. Long period of no usage

People often stop using old accounts after switching jobs, relocating, or opening new accounts.

2. Multiple accounts

Customers may forget older accounts when they open newer ones for salary credit or convenience.

3. NRE/NRO status changes

NRIs sometimes stop operating resident accounts without converting them properly.

4. Ageing customers

Senior citizens may not use accounts regularly due to accessibility issues.

5. Dormant investments

Some accounts were originally made only for receiving dividends, maturity payments, or refunds, and remain unused afterwards.

Identifying the reason can help you prevent future inactivity.

Why Should You Reactivate an Inoperative Account?

Many people ignore dormant accounts, but reactivation is important because:

• You may need the funds lying in the account
• Unclaimed balances may be transferred to RBI’s DEAF after 10 years
• KYC updates may require an active account
• It prevents fraud and misuse
• Helps maintain financial records clean and updated

Reactivation ensures seamless banking and access to your money.

Documents Required for Activation of an Inoperative Account

To reactivate your account, banks typically require:

1. KYC documents

   • Aadhaar Card

   • PAN Card

   • Passport, Driving License, or Voter ID

2. Proof of Address (if different from Aadhaar)
3. Recent passport-size photo
4. Signed reactivation form
5. Self-declaration letter for account activation

Some banks may ask for additional documents depending on the customer profile (especially for NRIs).

Step-by-Step Guide: Activation of Inoperative Bank Accounts

Activating a dormant account is a straightforward process. Here’s how it works:

Step 1: Visit the Home Branch of the Bank

Most banks require the customer to visit the branch where the account is maintained. Some banks now allow email or online KYC updates, but a branch visit is still the safest option.

Step 2: Submit a Request for Activation

Ask for an 'Account Activation' or ‘Dormant to Active’ form.
Fill in the details such as:

• Account number
• Customer name
• Contact information
• Reason for inactivity

Some banks allow a simple written request instead of a form.

Step 3: Complete KYC Verification

You will be asked to provide valid KYC documents.
KYC includes:

• Identity verification
• Address verification
• PAN details

For NRI accounts, banks require a passport copy, a visa copy, overseas address proof, and updated NRI details.

Step 4: Provide Signature Verification

Your signature will be matched with the bank’s records.
If the signature has changed, you may have to update it.

Step 5: Perform a Small Transaction

To mark the account as active, the bank may ask you to perform a simple debit or credit transaction such as:

• Deposit ₹100 or ₹500
• Withdraw a small amount
• Transfer funds

This re-establishes account activity.

Step 6: Account Reactivation

Once verification is complete, the bank will reactivate your account.
This may take:

• Same day in some banks
• 2–5 working days in others

You will then regain full access to ATM, net banking, and cheque services.

Charges for Reactivating an Inoperative Account

Most banks do not charge any fee for reactivation.
However, some banks may charge:

• Minimum balance penalty (if applicable)
• Re-KYC fees for NRI customers

Always check with the branch to avoid confusion.

How to Avoid Account Becoming Inoperative Again

To keep your bank account active:

• Make at least one customer-initiated transaction every 12–18 months
• Maintain the minimum balance
• Update KYC regularly
• Use SMS and email alerts to monitor activity
• Link your account to digital payments or automatic recurring deposits

Even a small deposit once a year keeps the account active.

What Happens to Unclaimed Funds After 10 Years?

If an account remains inoperative for 10 years or more, the funds are transferred to the RBI’s Depositor Education and Awareness Fund (DEAF).
However:

• The account holder or legal heirs can still claim the money anytime
• Banks must assist in recovering unclaimed balances

It is never “lost,” just transferred for safety.

Conclusion

Activation of inoperative bank accounts is a simple yet essential process that ensures your funds remain accessible, secure, and properly documented. Whether your account became dormant due to inactivity, relocation, or personal circumstances, reactivating it requires only a few steps—updating KYC, providing verification, and performing a small transaction.

Keeping your bank accounts active helps you maintain financial continuity, prevents complications in the future, and ensures that your money is always within your control.

If you need help recovering unclaimed bank balances, NRI account reactivation, or guidance on documentation, you can always seek professional support to make the process faster and stress-free.