RBI has launched a new scheme for inactive accounts and unclaimed funds. Find out what's special.

RBI Launches Incentive Scheme to Reduce Dormant Accounts and Unclaimed Deposits, Valid Till September 2026

The Reserve Bank of India (RBI) has rolled out a new incentive scheme aimed at reducing the number of inactive bank accounts and unclaimed deposits. Effective from October 1, 2025, the scheme will run until September 30, 2026, encouraging banks to proactively engage with customers and return long-pending funds to their rightful owners.

Why the Scheme Was Introduced

According to RBI, inactive accounts and unclaimed funds not only create operational challenges for banks but also raise concerns about customer awareness and financial transparency. To tackle this issue, the central bank has decided to reward banks that take concrete steps to reactivate dormant accounts and return unclaimed deposits.

The move is also aligned with RBI’s objective of strengthening depositor confidence, promoting financial inclusion, and ensuring that public money remains safe and accessible.

Incentive Structure for Banks

The incentive framework is based on how long an account has remained inactive. The longer the dormancy period, the higher the incentive payout for banks that manage to return the funds to customers.

Here is the detailed breakdown:

• Inactive for up to 4 years: Banks will receive 5% of the deposit amount or ₹5,000 (whichever is lower).

• Dormant for 4–8 years: Incentive of 6% or up to ₹10,000.

• Inactive for 8–10 years: Incentive of 7% or up to ₹15,000.

• Dormant for more than 10 years: Incentive of 7.5% or up to ₹25,000.

This system motivates banks to actively track down account holders or their legal heirs and return the unclaimed money.

What Happens to Unclaimed Deposits?

As per existing regulations, funds lying idle in dormant accounts for more than 10 years are transferred to the Depositor Education and Awareness (DEA) Fund. Customers, however, retain the right to claim their money at any time.

With the new scheme in place, banks are expected to make a more concerted effort to reunite depositors with their funds rather than allowing the money to remain unclaimed indefinitely.

Benefits for Customers

To make the process smoother, RBI has instructed banks to simplify account reactivation. Customers can now:

• Update their KYC details via branch visits,

• Use video-KYC facilities, or

• Approach authorized business correspondents to reactivate accounts.

This digital and branch-based flexibility is expected to ease the process for millions of customers, especially those in rural or semi-urban areas.

Compliance and Monitoring

Banks will be required to submit quarterly reports to the RBI, detailing the claims settled under this incentive scheme. These reports must be verified by senior management to ensure accuracy and accountability.

Such monitoring will also enhance transparency in the banking sector while reinforcing the trust of depositors who may have left their accounts unattended for long periods.

Final Takeaway

With nearly thousands of crores lying idle in dormant accounts across the country, RBI’s new incentive scheme could significantly reduce unclaimed deposits while boosting financial awareness.

By offering banks a structured incentive and customers an easier reactivation process, the scheme is a win-win solution—helping customers reclaim their money, ensuring safer banking practices, and promoting greater transparency across the financial system.

The initiative will remain open until September 30, 2026, giving both banks and customers ample time to act.