The Reserve Bank of India (RBI) on Monday asked banks to undertake at least an annual review of accounts where there is no customer-induced transactions for more than a year.

This came as the regulator came out with comprehensive guidelines on unclaimed deposits or inoperative accounts.

A customer inducted transaction can either be a financial (ATM/cash withdrawal or deposit, RTGS/NEFT transactions or debit card transactions among others), non-financial (request for cheque book or debit card, change in transaction limit among others) or KYC updation.

The revised instructions, which will come into effect from April 1, are expected to complement the ongoing efforts and initiatives taken by banks and the RBI to reduce the quantum of unclaimed deposits in the banking system and return such deposits to their rightful owners/claimants.

The RBI said in a notification that a savings or current account would be treated as inoperative if there are no customer-induced transactions in the account for a period of over two years.

The credit balance in any deposit account maintained with banks, which have not been operated upon for 10 years or more, or any amount remaining unclaimed for 10 years or more is transferred to the ‘Depositor Education and Awareness’ (DEA) Fund Scheme, 2014.

With regard to tracing customers of inoperative accounts/unclaimed deposits, it said, the bank shall contact the holder of such accounts through letters, email or SMS. The email/ SMS shall be sent on a quarterly basis, it said.