RBI Business Correspondents to Update KYC | Reactivate Dormant Accounts

Press Release: 2025-2026/403, Dated: 23.05.2025

1. Regulatory Context

The Reserve Bank of India (RBI) classifies any deposit account with no customer-initiated transaction for two consecutive years as inoperative. Amounts that remain untouched for ten years are transferred to the Depositor Education & Awareness (DEA) Fund. To prevent this, banks must give customers a convenient way to update KYC and reactivate such accounts.

2. Existing Requirement (Circular 01 Jan 2024 – Paragraph 6.1)

Until now, paragraph 6.1 mandated that:

• Every branch (home or non-home) must let customers update KYC for reactivation.
• V-CIP (Video Customer Identification Process) must also be offered where the bank provides that facility.

3. Public-Comment Window

• Draft release date – 23 May 2025
• Last date to submit comments – 6 June 2025 (via the “Connect-2-Regulate” portal or by email to the RBI’s Business Conduct Group).

4. Why the Change Matters

1. Rural Reach – India’s 1.5-lakh BC outlets become one-stop points for dormant-account revival, reducing travel and cost for customers in remote areas.
2. Lower Pendency – Banks can chip away at the ₹78,000-crore pile of unclaimed deposits by mobilising BC networks for door-step KYC.
3. Financial Inclusion – Senior citizens, migrant workers, and low-income customers—who often let accounts lie dormant—gain an easier path back into the formal system.

5. Customer Benefits at a Glance

• Proximity – Reactivation at the nearest BC kiosk—often within the customer’s village or ward.
• Choice – Three parallel channels (branch, V-CIP, BC) to suit connectivity and mobility constraints.
• Continuity – Prevents unnecessary transfer of funds to the DEA Fund and restores full banking privileges quickly.

6. Takeaway

By formally bringing Business Correspondents into the KYC-updation loop, the RBI is tightening the last mile in its dormant-account clean-up drive. Banks should move swiftly to integrate BC workflows, plan outreach camps, and file a considered response before 6 June 2025—while customers gain a faster, cheaper route to reclaim their idle funds.

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