RBI asked banks to reduce number of inoperative, frozen accounts and report their numbers quarterly
Reportedly the RBI on monday asked banks to “urgently" reduce the number of inoperative or frozen accounts by taking necessary steps and also report their numbers quarterly. Expressing concern over the rising sums of money lying in such accounts, the RBI said its supervisory inspections have revealed a slew of problems due to which accounts are becoming inoperative or get frozen. The Department of Supervision, RBI, recently conducted an analysis, which revealed that the number of inoperative accounts/unclaimed deposits in several banks was on the higher side vis-a-vis their total deposits as well as in absolute terms.
Perhaps banks may look at enabling seamless updation of KYC (know your customer) through mobile/internet banking, non-home branches and Video customer Identification Processes. The notification said it has observed instances where the accounts of underprivileged beneficiaries of state-run cash transfer schemes have been frozen due to other factors such as pending updation/ periodic updation of KYC, even though such beneficiary accounts are required to be segregated to facilitate uninterrupted credit of scheme funds.
Perhaps banks may look at enabling seamless updation of KYC (know your customer) through mobile/internet banking, non-home branches and Video customer Identification Processes. The notification said it has observed instances where the accounts of underprivileged beneficiaries of state-run cash transfer schemes have been frozen due to other factors such as pending updation/ periodic updation of KYC, even though such beneficiary accounts are required to be segregated to facilitate uninterrupted credit of scheme funds.
Moreover apart from this, the banks may also facilitate Aadhaar updation for customers through branches providing Aadhaar-related services, it said, adding that instructions have been issued to state-level banking committees to proactively monitor the situation in their respective jurisdictions to minimise customer inconvenience. Banks are required to place the notification on inoperative accounts before the CSC of the Board at their next meeting along with a monitorable action plan for compliance.