The Scale of Unclaimed Funds
Recent figures presented to Parliament in early 2026 paint a stark picture: over ₹72,400 crore in unclaimed deposits has been transferred to the Reserve Bank of India's (RBI) Depositor Education and Awareness (DEA) Fund. This massive sum represents money
from accounts that have been inactive for ten years or more. Data shows that public sector banks account for the bulk of this amount, holding over ₹60,500 crore in unclaimed funds as of January 2026. While the RBI has rules preventing banks from levying penalties for non-maintenance of minimum balance on dormant accounts, the real penalty is the loss of access and the complex process of reclaiming your money once it's transferred to the DEA Fund. The growing size of this fund underscores a widespread issue of forgotten savings and disconnected account holders.
More Than Just Lost Money: The Fraud Risk
A dormant account is a prime target for fraudsters. Because these accounts are not regularly monitored by their owners, they become vulnerable to identity theft and unauthorised transactions. Criminals can exploit outdated contact information or use forged documents to gain control of an account, sometimes with inside help from bank employees. Once they have access, they can attempt to reactivate the account and siphon off funds, often starting with small transactions to avoid detection before moving to larger withdrawals. The RBI has recognised this risk, and reactivating a dormant account is now treated as a high-risk event by banks, triggering stricter verification to prevent misuse. An unmonitored account isn't just idle money; it's a potential security liability.
Understanding Dormancy: When Does an Account Become Inactive?
According to RBI guidelines, a savings or current account is classified as 'inoperative' or 'dormant' if there are no customer-initiated transactions for a period of two years. It's crucial to understand what counts as a transaction. Activities like cash deposits, withdrawals, cheque usage, ATM transactions, and online fund transfers will keep an account active. However, bank-initiated entries, such as the crediting of interest or the debiting of service charges, do not count towards this activity. Once an account becomes dormant, banks impose restrictions, which can include freezing access to ATM withdrawals, online banking, and cheque book issuance.
Simple Steps to Keep Your Accounts Active
Preventing an account from becoming dormant is straightforward. The simplest method is to conduct at least one small transaction every year or so. Consider setting up a small, recurring standing instruction to transfer a nominal amount between your accounts. Another effective strategy is to consolidate your bank accounts. Managing two or three accounts is far easier than keeping track of multiple ones, reducing the chance that one will be forgotten. Regularly updating your KYC details, including your mobile number and email address, is also vital. This ensures you receive important notifications from your bank, including alerts if your account is about to become inactive.
How to Reclaim Your Funds
If you discover an account has already become dormant, you can reactivate it. This typically requires visiting a bank branch, submitting a written request, and providing fresh KYC documents like your PAN and Aadhaar card. Banks are not permitted to charge a fee for reactivating a dormant account. For funds that have been inactive for over a decade and moved to the DEA Fund, the process is more involved but still possible. The RBI has launched a centralised web portal called UDGAM (Unclaimed Deposits – Gateway to Access Information) to help people search for their unclaimed deposits across multiple banks in one place. Even after being transferred to the DEA Fund, the money remains yours and can be claimed from the bank.
