A savings or current bank account is marked inactive when no customer-initiated transactions such as deposits, withdrawals, online transfers, or even internet banking logins take place for 12 months straight. If the account continues to remain unused for 24 months, it changes status to dormant as per banking regulations in India and many other countries.
What Happens When Your Account Becomes Dormant
Once your account is considered dormant, several restrictions come into play. You may not be able to use ATMs, make online transfers, or carry out transactions with your debit card. The account continues to earn interest on balances, and any refunds, dividends, or incoming credits are still allowed. However, you lose the convenience of freely operating your account until it is reactivated. The primary reason banks enforce these rules is to prevent fraud and protect accounts that have been forgotten or left unattended.
The consequences of a dormant account go beyond minor inconveniences. Standing instructions like auto-debits, bill payments, or EMIs linked to the account may get disrupted, which can cause defaults. There’s also the risk of missing vital credits such as salaries, tax refunds, or investment proceeds if they are sent to the dormant account. In the longer term, unclaimed balances are transferred to specific funds like the Depositor Education and Awareness Fund (DEAF) in India.
Reactivating or Preventing Dormancy
Reactivating a dormant account is straightforward, though it requires action from you. Typically, you need to visit the branch with valid ID and address proof, along with a written request for reactivation. Some banks also allow the process through internet or mobile banking if your KYC details are updated. Once verified, the bank restores normal operations, and your account regains full functionality.
The easiest way to avoid your account turning dormant is to conduct at least one transaction every year. It doesn’t need to be large—something as simple as depositing a small sum, withdrawing money, or making a quick online transfer is enough. Even updating your passbook or checking your balance through the branch or online channels can help reset activity. By doing this, you not only keep your account active but also prevent future complications.
