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What is meaning of dormant account? How to activate dormant account 2021

Author: Vikash Ranjan
by Vikash Ranjan
Posted: Apr 16, 2021

A meaning of dormant account has had no financial activity for a long time, except interest payments. State regulations compel financial institutions to pass money invested in dormant accounts to the state treasury after the accounts have been dormant for a certain amount of time. Depending on the territory, the length of time varies. For example, if you haven’t made any deposits in your savings or current account in over a year, the account becomes inactive. The account becomes dormant or inoperative after two years of inactivity.

You can prevent this by carrying out transactions such as outgoing bills, cheque transactions, cash deposits, cash withdrawals, and so on.

In most cases, you won’t be able to make any withdrawals or use the Electronic Clearing Service for credit or debit in a dormant account. To reactivate it, contact your account base branch and send a written request along with your proof of identity. You may be fined for reactivating the account.

It’s not uncommon for us to have several savings accounts under our names but be unable to keep them running. Keeping track of several savings accounts is difficult. It adds to the chaos and mismanagement. It will cost you money if you don’t pay attention to maintaining your inactive bank account. This post outlines how to activate dormant bank account that has been inactive for two years, as well as why the bank makes them inactive.

For more than a year, if the SB or current account hasn’t had any transactions (credit/debit excluding interest credited to the bank, deduction of service charges), the account is considered inactive. The account is declared dormant/inoperative if it has been inactive for more than two years. For a long time, the only thing an inactive account might do was post interest. Dormant accounts normally do not have a statute of limitations, which means the administrator or recipient can claim funds at any time.

Table of contents
  • Reasons for dormant account
  • Do banks pay interest on dormant accounts?
  • How to avoid Dormant Account
  • How to activate dormant account 2021
  • Submit your Know-Your-Customer (KYC) documents
  • Make a small deposit
  • Can I activate my dormant account online?
  • How long does it take to activate a dormant bank account?
  • How can I reactivate my SBI dormant account?
  • 1. Submit a request for activation of your account through Internet banking
  • 2. By calling the State Bank of India customer care number
  • 3. Contacting your home branch of State Bank of India
  • What is the difference between dormant and inoperative accounts?
  • What is the Background for the creation of a different class of accounts under the head of dormant or inoperative?
  • Sample letter to activate dormant account
  • How to activate dormant account in airtel
  • 1- Online application
  • Activation Through Airtel store
  • How to activate a dormant account in Kotak online
Reasons for dormant account

If you have a bank account that you no longer use, it will be considered dormant after a certain amount of time has passed.

Depending on the policies of the bank in question, this may be anything from a year to 15 years.

Moving houses is a common cause for bank accounts to become dormant. If you have multiple accounts open and fail to change the address associated with one of them, the account can become officially inactive after a certain period.

If the bank receives letters stating that you no longer live at that address, the account will be declared dormant earlier.

Banks, on the other hand, take this measure to ensure stability and shield consumers’ funds from fraudulent transactions. This is so for both foreign clients and internal staff.

When an account is inactive for a long period, bank staff can quickly obtain a sample of the account holder’s previous signatures. This makes it easy for them to get their hands on the money they’ve invested by using withdrawal slips. To protect customers’ accounts from frauds like this, banks pool inactive accounts into a single cluster and keep track of them in a database.

Also, banks normally notify consumers two or three months before closing an account.

However, this information is usually provided in the form of a registered letter to the address listed on the bank account’s records.

Do banks pay interest on dormant accounts?

If there have been no deposits in a deposit or current account for more than two years, it should be considered inactive or dormant. Both the form of transactions, i.e. debit and credit transactions triggered at the request of consumers as well as third parties, should be weighed when classifying an account as "inoperative."

If the account is active or not, interest on savings bank accounts should be credited daily. If a Fixed Deposit Receipt matures with no proceeds, the balance left unclaimed with the bank will earn interest at the savings bank rate."

How to avoid Dormant Account

In this case, the adage "prevention is easier than treatment" should be your reference. To prevent the hassles of coping with an expired or dormant account and the associated fines, it’s safer to conduct transactions on all of your savings or current accounts once in a while, preferably once every 6 months or at the very least once a year. Regularly making simple financial operations, such as cash withdrawals or deposits, funds transfers through every banking system, check and bill payments, and so on, are examples of such transactions.

You can log into your account through net banking and switch small sums between accounts to keep the account working if you have moved to a different city or are out of the country. However, if you believe that the account is no longer valuable to you, it is better to close it. However, several banks will charge you a fee if you close your current or savings account within the first year of opening it. Banks, on the other hand, are not permitted to charge a premium for this service.

How to activate dormant account 2021

What about the one account you opened in college and haven’t checked in on since? Is it been two years since you deposited or borrowed money from the account?

You might be shocked to learn that you can no longer transact in that account. This is because your account has been marked as dormant.

Fortunately, restoring these accounts to active status is a simple process. This article goes into how to reactivate inactive accounts in great depth…

You would not be allowed to make such a purchase if your account has already been dormant (that is if it has been inactive for more than 24 months). Don’t worry; if you reactivate your account, your money will always be available to you.

Before reactivating an inactive account, banks are required to conduct due diligence, and abrupt demands for withdrawals from such accounts are bound to be handled with caution.

However, you will find that reactivating these accounts is a relatively simple operation.

The actual reactivation process would vary from bank to bank because the RBI only instructs banks to practice due diligence and has not specified any uniform reactivation process.

  1. Submit a written Reactivation Application

To reactivate your inactive account, you must submit a written application.

This submission should have the explanation for not transacting and be forwarded to the respective bank’s branch manager.

This application must be signed by both account holders if the account is a shared account.

Submit your Know-Your-Customer (KYC) documents

Along with your reactivation application, you must apply your KYC records.

The paperwork required for KYC would be the same as those required when starting a new account.

Usually, you’ll require:

  1. Two passports sized photographs
  2. Address proof
  3. Identity proof
  4. PAN card
  5. Your old passbook, cheque-book, and ATM/Debit card

Before the bank approves your offer for reactivation, your signatures will be checked.

Make a small deposit

Your bank account should be reactivated within 24 hours of completing the reactivation process, but it could take up to a week in some circumstances.

Create a tiny deposit as soon as your account is reactivated to prevent it from becoming inactive again. Any banks can require this deposit in addition to your reactivation order.

Please keep in mind that you will most likely need to visit your bank branch in person to activate dormant account. Some banks offer online reactivation, although this is more of an anomaly than a rule; however if you are an NRI, you can order this from your bank.

Can I activate my dormant account online?

You can reactivate or deactivate your account at any time to run or close it. The actual reactivation procedure can differ from one bank to the next. In most cases, the account is allowed within 24 hours.

To reactivate an expired account, you must make a cheque or ATM purchase. You will give the bank a safe message from your Internet banking ID instructing it to debit from this account to another if you have any active accounts.

To activate a dormant account, fill out a formal application and explain your absence to the bank. Until reactivating accounts, banks are required to conduct due diligence in checking consumer credentials. To complete the Know Your Customer formalities, banks usually need account holders to show themselves with address evidence and identification certificates at the nearest branch. In most cases, banks are unable to charge fees for the activation of an inactive account.

How long does it take to activate a dormant bank account?

The account is usually allowed within 24 hours. An account holder must make a transaction by check or ATM for this reason. If you have other active accounts, you can use your Personal Internet Banking ID to send a safe message to the bank. This must be accompanied by a debit instruction of at least one rupee from this account to the other.

Can we deposit money in a dormant account?

An inactive bank account may be used to collect funds. To remove money from the account, the client must file new KYC documents along with a recommendation for the account to be converted to operational status. If the branch is satisfied, the account will be converted to operative status. If the remittance is made by RTGS/NEFT, the branch may choose to refuse or approve the sum held in escrow and release it after the KYC has been updated.

How can I reactivate my SBI dormant account?

The State Bank of India allows you to reactivate your dormant account in one of the following ways:

1. Submit a request for activation of your account through Internet banking
  • Visit you will need to visit the State Bank of India website.
  • Login to Internet Banking using User ID and Password.
  • Go to service request section Request to reactivate the account
2. By calling the State Bank of India customer care number

You can dial the customer care number of the State Bank of India from your registered mobile number and request to reactivate your account

3. Contacting your home branch of State Bank of India
  • Personal Branch of State Bank of India Personal Branch
  • To change the status of the account from dormant to active, submit a written request to the bank
  • This request must be signed by all joint holders of the account, irrespective of operating mode to reactivate an account.
  • THE latest KYC documentation should be complied with. All account holders are required to submit their passport size color photograph, PAN card copies, proof of address, and proof of identity. Do not forget to carry the original for verification purposes.
  • To you have to cite a valid reason for not running an account in the past
  • Signatures of account holders can also be verified to activate a May account.
  • Then if the bank feels that then the account holders can be asked to surrender the ATM card/checkbook. In this case, the bank will issue new ATM cards and checkbooks. However, this may not be mandatory.
  • State Bank of India will do due diligence in verifying customer credit before reactivating an inactive account.
  • Asked You will be asked to make a transaction by check or through an ATM.
  • Formal If all the formalities are completed, the account will be activated within 24 hours.
What is the difference between dormant and inoperative accounts?

In layman’s terms, dormant denotes inactivity, while inoperative denotes the absence of activity, i.e. no recent transactions. "A deposit, as well as current account, should be considered as inoperative/inactive if there are no transactions in the account for more than two years," according to RBI guidelines. "To classify an account as ‘inoperative,’ both the form of transactions, i.e., debit and credit transactions triggered at the instance of consumers as well as third parties should be regarded," RBI says.

However, the bank’s service costs or interest credited should not be taken into account." When the interest on a Fixed Deposit account is transferred to the customer’s Savings Bank account as per his or her request, it is considered a customer-induced transaction. It should be noted, though, that certain banks had internal rules/intervals before an account could be classified as inactive and/or inoperative. Bankers should consult their internal circulars for this information, but the two-year timeframe mentioned above is applicable under RBI guidelines. As a result, according to RBI guidelines, there is no distinction between dormant and inactive accounts.

What is the Background for the creation of a different class of accounts under the head of dormant or inoperative?

Section 26 of the Banking Regulation Act of 1949 states, among other things, that any banking corporation must send a return in the prescribed form and manner to the Reserve Bank of India within 30 days of the end of each calendar year (i.e., December 31st) of all accounts in India that have not been run on for ten years. Unclaimed deposits are those that have not been claimed. As a result, banks followed these rules. Slowly, the number of unclaimed deposits grew to a point where it drew harsh scrutiny from the media and other reports.

Sample letter to activate dormant account

If no specified form is available, here is a sample letter to send to SBI, Adyar Branch, Chennai. This letter will be used to apply for a dormant account at any bank.

To: The Branch Manager


Kasturba Nagar,



Subject: Request for Activation of my Dormant Account no. _


My above-mentioned [savings/current] account is in dormant status. The reason for the dormancy of the account is [give the details here].

I request you to please reactivate the account. I am enclosing the list of documents based on which the account can be reactivated.

The Account Number is: ______

Documents enclosed with this application are:

  1. A self-attested copy of my photo ID Proof of [mention what type it is, such as PAN card or Driving license] and 2 passport size photos.
  2. A self-attested copy of my address [mention what type it is, such as your Aadhaar card]
  3. A self-attested copy of my account passbook
  4. A self-attested copy of my checkbook
  5. A cheque for Rs. __/- drawn on ________________Bank, ____________branch to be deposited in my dormant account [mention account number again here]
  6. Cash for Rs. __/- deposited in my dormant account.

Please do the needful and reactivate the account at the earliest.

Thanking you,

Yours Sincerely,

[your signature]

[your name]

[your address]

[your phone number(s)]

How to activate dormant account in airtel

Account activation necessitates the completion of two formalities.

An invitation from you to reactivate your account. Often, clarify why you’re doing so. In the application, you can have your account details.

You must complete the KYC specifications once more. It means you’ll have to resubmit your address and evidence of identity.

There are two options for completing these two stages.

1- Online application

You can also send your application online to activate your inactive account.

  • The mailing address is
  • In the subject line of your application, you will need to specify your account number.
  • You will also have to attach your Aadhaar copy with the application.

Note, this method may take up to a week.

Activation Through Airtel store

You can also visit the Airtel Banking point for inactive account activation. You can find these banking points through the Airtel Database app or the website.

  • You need to write an application to activate your account.
  • You do not need a document for this method. You only need to provide your Aadhaar number for activation.
  • Airtel store will complete the EKYC process immediately. This is done by authenticating with your fingerprint.
  • This process is very fast and your account gets activated instantly.
How to activate a dormant account in Kotak online

To activate dormant account, please visit the nearest branch with the original PAN card and any one of the officially valid KYC documents:

  • Voter ID Card
  • Passport
  • driving license
  • NREGA Job Card
  • Letter issued by National Population Register containing name, address details

If the account is a joint account, then all the account holders need to visit the branch. Please carry the above documents for all holders.

Source- Flow Capital Press

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Author: Vikash Ranjan

Vikash Ranjan

Member since: Apr 13, 2021
Published articles: 1

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