Inoperative A/Cs & FDs to get interest

RBI Fixes 3.5% Rate For Unclaimed Fixed Deposits
New Delhi: In an attempt to make banks more customerfriendly, RBI on Friday notified that banks should continue to pay interest at the rate of 3.5% on inoperative accounts and on unclaimed fixed deposits (FDs) after their maturity. RBI has also barred banks from charging any fee on activation of inoperative accounts.
At present, banks do not pay any interest on inoperative savings accounts and on unclaimed FDs after its maturity, though they use the fund. The central bank said, “There is a feeling that banks are undeservedly enjoying the unclaimed deposits, while paying no interest on it.’’
“Interest on saving accounts should be credited on regular basis whether the account is operative or not. If a fixed deposit matures and proceeds are unpaid, the unclaimed amount will attract interest,’’ the RBI said in the notification. At present, the interest rate on savings account is 3.5%.
The RBI has also asked banks to trace the account holders or their legal heirs directly or through introducers. It told banks to contact customers in case accounts have remained inoperative for more than a year and find out the details of their new accounts, where the money could be transferred.
RBI has also changed the norms of declaring an account inoperative or dormant. It said that savings as well as current accounts should be treated as inoperative/dormant if there is no transaction for over two years and not for one year as treated now.
In case the whereabouts of the customers are not traceable, banks should contact the persons who had introduces account holders. They could also contact the account holders telephonically or through e-mail, in case the details have been been furnished to the bank.
RBI has asked banks to handle the inoperative accounts with care to avoid the risk of fraud and at the same time “the customer should not be inconvenienced in any way, just because his account has been rendered inoperative’’.
The RBI also prescribed a comprehensive notice board format for bank branches to inform the customers about the interest rates, service charges and grievance redressal mechanism.
Display interest rates, banks told
Mumbai: In order to improve the banking services and financial literacy in the
country, the Reserve Bank on Friday prescribed a comprehensive notice board format for bank branches to inform the customers about the interest rates, service charges and grievance redressal mechanism.
This display of information, RBI said in a communication to the commercial banks, should “enable customers to make informed decision regarding products and services of the bank and be aware of the rights as also the obligations of the banks to provide essential services.” AGENCIES