The Reserve Bank of India (RBI) has issued new guidelines to be implemented from January 1, 2025, which are very important for bank account holders. The main objective of these new rules is to make the banking system more secure, transparent and efficient. RBI believes that these changes will help in reducing banking fraud and protect the interests of customers.
Under these new rules, certain types of bank accounts will be closed. This includes dormant accounts, inactive accounts and zero balance accounts. Besides, changes have also been made in the rules related to fixed deposits (FD). All these changes will have a direct impact on millions of bank customers. Therefore, it is important that all account holders understand these new rules and take necessary steps to keep their accounts safe.
New guidelines of RBI: at a glance
| Description | Information |
| effective date | 1 January 2025 |
| affected accounts | Dormant, Inactive, Zero Balance |
| Dormant Account Definition | No transaction for more than 2 years |
| inactive account definition | No transactions for more than 12 months |
| zero balance account | Long term zero balance accounts |
| Changes in FD rules | New rules for NBFC and HFC |
| UPI 123Pay Limit | Increase from ₹5,000 to ₹10,000 |
| Credit Card Lounge Access | New tiered spending criteria |
What are dormant accounts and why will they be closed?
Dormant accounts are accounts in which there have been no transactions for the last two years or more. According to RBI, such accounts are more vulnerable to hacking and fraud. Therefore, it is necessary to close them for the safety of customers and the banking system.
To activate a dormant account:
- Visit your bank branch
- Update your KYC
- make a transaction on the account
What will be the impact on inactive accounts?
Inactive accounts are accounts that have not had any transactions for the last 12 months or more. RBI believes that such accounts increase unnecessary burden on banks and there is also a risk of online fraud.
To activate an inactive account:
- Make at least one transaction on the account
- Use Online or Mobile Banking
- Withdraw or deposit money from ATM
Why will zero balance accounts be closed?
Accounts having zero balance for a long period will also be closed. Its purpose is:
- Preventing Abuse of Accounts
- reducing financial risks
- Increasing regular contact between customers and banks
- Ensuring better compliance with KYC rules
To avoid zero balance:
- Maintain minimum balance in account
- Make small transactions regularly
- Use it for salary or pension account
New rules related to fixed deposit (FD)
RBI has issued new rules related to FD for Non-Banking Financial Companies (NBFC) and Housing Finance Companies (HFC). These rules will come into effect from January 1, 2025.
Major changes:
- Simplification in premature withdrawal rules
- Better communication between depositors and financial institutions
- Improvement in nomination process
Increase in Transaction Limit of UPI 123Pay
National Payments Corporation of India (NPCI) has increased the transaction limit of UPI 123Pay from ₹5,000 to ₹10,000. This change will be very beneficial for feature phone users who have limited internet access.
Benefits of UPI 123Pay:
- UPI payment facility without smartphone
- Digital transaction facility even on feature phones
- Promotion of digital payment in rural areas
Changes in Credit Card Lounge Access
The rules for airport lounge access have been changed for RuPay credit card holders. Now cardholders will get lounge access based on tiered spending criteria.
New rules:
- Different tiers based on spending
- Separate lounge access facilities for each tier
- Minimum spending requirement for complimentary access
Important tips for bank account holders
- Make regular transactions: Make at least one transaction every month.
- Keep KYC updated: Keep updating your KYC from time to time.
- Maintain Minimum Balance: Always maintain minimum balance in the account.
- Use Online Banking: Keep account active through mobile or internet banking.
- Check bank statement: Check your bank statement regularly.
Impact of new RBI rules
These new rules will have a wide-ranging impact. Banks will have to make changes in their systems and customers will have to improve their banking habits. But in the long run, these changes will strengthen the banking system.
Positive Effects:
- Reduction in banking fraud
- Increase customer security
- Improving the efficiency of the banking system
Challenges:
- It may be difficult for some customers to keep their accounts active
- Need to spread awareness in rural areas
- It may take time for banks to update their systems
Disclaimer:
This information is based on the official guidelines issued by RBI. However, banking rules may change from time to time. Therefore, contact your bank or visit the official website of RBI for accurate and updated information. This article is for general information only and should not be construed as legal or financial advice.
