A savings account in which there is no transactions
(deposits and/or withdrawals) over a long period, other than application of the
interest and/or service charges. Statute of limitations usually does not apply
to dormant accounts, and their funds can be claimed by their owner or
beneficiary at any time.
In India, there the period is of 2 years. In terms of RBI
guidelines "A savings as well as current account should be treated as
inoperative / dormant if there are no transactions in the account for over a
period of two years".
RBI says "for the purpose of classifying an account as ‘inoperative’
both the type of transactions i.e., debit as well as credit transactions
induced at the instance of customers as well as third party should be
considered. However, the service charges levied by the bank or interest credited
by the bank should not be considered". When the interest on Fixed Deposit
account is credited to the Savings Bank accounts as per the mandate of the
customer, it is treated as a customer induced transaction.
Note: Dormant Account can be claimed by a customer by
providing proper KYC documents and an application for the activation of the
account.
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