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No, on both counts. An account with no customer-initiated transaction for two years is 'inoperative'. The bank may not charge a penalty for non-maintenance of minimum balance on an inoperative account, may not charge anything to reactivate it, and must keep crediting interest on a savings account while it sleeps. You reactivate by updating KYC at any branch of the bank, including a non-home branch, or by video KYC if the bank offers it. After ten years with no transaction, the balance moves to RBI's DEA Fund, but it stays yours; search UDGAM.
No, on both counts. An account with no customer-initiated transaction for two years is 'inoperative'. The bank may not charge a penalty for non-maintenance of minimum balance on an inoperative account, may not charge anything to reactivate it, and must keep crediting interest on a savings account while it sleeps. You reactivate by updating KYC at any branch of the bank, including a non-home branch, or by video KYC if the bank offers it. After ten years with no transaction, the balance moves to RBI's DEA Fund, but it stays yours; search UDGAM.
A returnee from Sharjah finds his 2011 salary account frozen and is asked to 'pay ₹1,800 in charges' before it can be used. Under RBI's rules effective 1 April 2024, no reactivation charge and no minimum-balance penalty can be levied on an inoperative account. He updates KYC and the charges, if any were debited, are reversible on request.
RBI's January 2024 circular on inoperative accounts and unclaimed deposits, effective 1 April 2024, defines the two-year test using customer-induced transactions only (bank charges and interest credits do not count as activity, but a standing instruction or an auto-renewal does).
It bars penal charges for minimum balance on inoperative accounts, bars activation charges, requires interest to continue on savings deposits, requires banks to warn you before an account turns inoperative, and requires reactivation at any branch or by video KYC. Accounts opened for government-scheme benefits and scholarships must not be classified inoperative for non-operation.
Balances untouched for ten years move to the Depositor Education and Awareness Fund and can be claimed at any time; the bank must list them on its website and on UDGAM. Separately, RBI has long said banks should not penalise minimum-balance shortfall in ordinary accounts beyond a proportionate charge, and several large banks dropped minimum-balance charges on savings accounts in 2025; check your bank's current schedule.
Whether the account is 'inoperative' (two years) or merely 'frozen' for a KYC or other reason; the rules differ What charges were debited in the dormant period, for reversal Your KYC documents: one ID, one address proof, a recent photo; NRIs need to re-declare status Whether a ten-year balance has gone to the DEA Fund (UDGAM search) Whether you still need this account; if not, close it properly after reactivation
Paying the 'charges' to get it over with. Ask for the schedule of charges and the RBI basis; most branches back down. Also: forgetting that a resident account held by an NRI should have been re-designated as NRO; fix that at reactivation.
Kerala has an unusually high number of sleeping salary and NRE accounts from Gulf postings. Under RBI's rules an NRE account of someone who has returned must be re-designated, and an inoperative NRO account is subject to the same no-penalty rule.
Account dormant since 2019 with ₹14,200. The bank shows ₹3,600 of 'minimum balance charges' debited during dormancy. Under the April 2024 rule those are not permissible for the inoperative period; write and ask for reversal with the circular reference.
If the account was frozen by a court, tax authority or law-enforcement order, that is not dormancy and the bank cannot reactivate it until the order is lifted. If you want the account closed rather than revived, you still need KYC first.
Visit any branch with KYC documents and ask for reactivation in writing Ask for reversal of dormancy-period charges, citing the RBI circular of 1 January 2024 Check UDGAM for any balance that reached the DEA Fund
How do I find forgotten bank deposits? (Vol 1) What happens to my NRE account when I return to India? (Vol 1)
Family finances
RBI circular RBI/2023-24/105 on Inoperative Accounts / Unclaimed Deposits, 1 January 2024, effective 1 April 2024, and the 2025 revisions · RBI UDGAM portal · Your bank's current schedule of charges Last checked: 22 August 2026. Rates, limits and whether you may qualify change. Confirm with the official source before you act. Ask Kerala Rising: Use only general, non-identifying facts.
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This page is general orientation, not personal insurance, investment, medical, legal, lending, tax, employment, or professional advice. Rules, rates, deadlines, and decisions can change. Confirm the current position with the named official source and use a licensed or qualified professional where your situation requires one. Kerala Rising does not decide whether you may qualify, approve claims, or promise an outcome.