RBI/2009-10/211
UBD.BPD (PCB) Cir No19 /13.01.000/2009-10

 November 9, 2009

Chief Executive Officers of
All Primary (Urban) Co-operative Banks 
 
Dear Sir

Unclaimed Deposits and Inoperative/ Dormant Accounts in UCBs

Please refer to our circular UBD.No.DS.PCB.Cir.9/13.01.00/2008-2009 dated September 01, 2008 on captioned subject.  In terms of para 2 (vi) of the circular, for the purpose of classifying an account as 'inoperative', debit as well as credit transactions induced at the instance of customers as well as third party should be considered.

2. There may be instances where the customer has given a mandate for crediting the interest on Fixed Deposit account to the Savings Bank account and there are no other operations in the Savings Bank account. Some doubts have arisen whether such an account is to be treated as inoperative account after two years.

3. In this connection, we clarify that since the interest on Fixed Deposit account is credited to the Savings Bank accounts as per the mandate of the customer, the same should be treated as a customer induced transaction. As such, the account should be treated as operative account as long as the interest on Fixed Deposit account is credited to the Savings Bank account. The Savings Bank account can be treated as inoperative account only after two years from the date of the last credit entry of the interest on Fixed Deposit account.

Yours faithfully,

(A.K. Khound)
Chief General Manager