NEW DELHI: In a significant move to enhance access and simplify procedures for reactivating dormant bank accounts and claiming unclaimed deposits, the Reserve Bank of India (RBI) has issued a new circular easing Know Your Customer (KYC) norms.
As per the circular, customers can now update their KYC details at any bank branch, including non-home branches, for the purpose of activating inoperative accounts and accessing unclaimed deposits. In a customer-friendly shift, the RBI has also allowed the use of Video-based Customer Identification Process (V-CIP) for such updates.
“Banks shall endeavour to provide the facility of updation of KYC in such accounts and deposits hrough Video-Customer Identification Process (V-CIP),” the RBI circular noted.
In another major reform, Banking Correspondents (BCs)—who operate in remote and underbanked areas—have been officially empowered to facilitate periodic and updated KYC processes. These correspondents often function through kirana stores, NGOs, self-help groups (SHGs), and microfinance institutions (MFIs).
Customers with no change in KYC information or only an address change may now provide self-declaration through BCs. These declarations can be submitted electronically or in physical form, including the use of biometric-based e-KYC authentication.
The RBI also reiterated the existing mandate that banks must transfer unclaimed deposits or inoperative accounts older than 10 years to the Depositor Education and Awareness (DEA) Fund.
Additionally, in a relief to customers, the RBI stated that low-risk accounts with pending KYC will not face any service disruptions until June 30, 2026. However, banks are required to send at least three notifications, including one physical letter, before initiating any action due to non-compliance.
The move is expected to significantly improve financial inclusion and customer convenience, especially in rural and remote areas, by removing geographical and procedural barriers.