The Reserve Bank of India (RBI) has issued two important draft circulars on 23rd May 2025, these draft circulars aim to improve customer convenience in managing dormant accounts and updating Know Your Customer (KYC) details. These revisions mark a major step forward in inclusive banking, especially for rural populations and Direct Benefit Transfer (DBT) beneficiaries.
What Are Dormant Accounts?
A dormant (inoperative) account is any savings or current account that has had no customer-initiated activity for 10 years. As per the Depositor Education and Awareness (DEA) Fund Scheme, 2014, banks are required to transfer the balances in such accounts to the DEA Fund maintained by the RBI.
While this mechanism protects long-unclaimed funds, reclaiming or reactivating such accounts often became a challenge for customers due to complicated KYC and branch-specific requirements.
Key Reforms Introduced by RBI in May 2025
1. KYC Updation made more accessible
As per the amended instructions:
Customers can now update KYC at any branch, not just their home branch.
Video-based Customer Identification Process (V-CIP) has been enabled for remote KYC updates.
Banks must adhere to KYC guidelines as per the RBI’s Master Direction of 2016 (as amended).
2. Business Correspondents Can Now Assist
For the first time, Business Correspondents (BCs)—banking agents in remote areas—are officially authorized to assist in activating dormant accounts and updating KYC. This move is expected to benefit millions, especially in underserved regions.
KYC Revisions for DBT, EBT, and PMJDY Accounts
RBI has also recognized the bottlenecks in periodic KYC updates, particularly in accounts used for:
Direct Benefit Transfers (DBT)
Electronic Benefit Transfers (EBT)
PM Jan Dhan Yojana (PMJDY) beneficiaries
Scholarship credits
The revised directions:
Encourage banks to organize KYC camps in rural and semi-urban areas.
Promote empathetic account handling to ease the reactivation process.
Focus on reducing the large backlog of pending KYC updates.
Customer Impact: What This Means for You
| Aspect | Old System | New RBI Rules (2025) |
| KYC updation location | Only at home branch | Any branch + V-CIP + BC support |
| Dormant account activation | Tedious and branch-dependent | Customer-friendly with remote options |
| Charges for reactivation | Varied across banks | No charges allowed |
| Rural outreach | Limited support | BCs empowered + banks to conduct outreach camps |
Track Unclaimed Deposits Online: UDGAM Portal
In addition to these reforms, RBI’s UDGAM portal allows users to search and claim unclaimed deposits across multiple banks using a single platform. This tool further reduces the need to visit individual branches or submit multiple requests.
Last Date for Public Comments
RBI has invited public suggestions on the draft KYC and dormant account guidelines until June 6, 2025. Individuals and institutions can provide feedback, helping shape future banking practices.
Final Thoughts
The RBI’s revised instructions reflect a customer-first approach to financial inclusion. By leveraging digital infrastructure and empowering Business Correspondents, these reforms aim to simplify access to rightful deposits, especially for rural populations and low-income beneficiaries. It’s a progressive shift that aligns with India’s vision of a transparent, inclusive, and tech-enabled banking ecosystem.
RBI simplifies dormant account activation and KYC updation with new 2025 rules. Learn how customers can update KYC via any branch, video call, or BCs—and reclaim unclaimed deposits easily via the UDGAM portal. For Detailed information contact us.