Hyderabad: As India stepped into the New Year 2026, the Reserve Bank of India issued a key warning to crores of bank customers across the country, cautioning that several inactive accounts could face closure from January 1.
According to the new guidelines, banks may shut down accounts that fail to comply with updated norms. The RBI said the move aimed to improve transparency in the banking system and curb the rising threat of digital fraud and financial misuse.
Bank accounts at risk under new RBI norms
Under the revised framework, banks will primarily review three categories of bank accounts. Dormant accounts include those that recorded no deposits or withdrawals for two consecutive years. Due to the high risk of misuse, banks may permanently close such accounts.
Inactive accounts fall under another category. Banks classify accounts with no transactions for 12 months as inactive. Unless account holders reactivate them, banking services may face disruption.
Banks are also reviewing zero-balance accounts that remain inactive for long periods and lack updated KYC details. To reduce administrative burden, banks may consider closing such account.
RBI tightens rules to curb fraud risks
The RBI said unused bank accounts often pose risks of money laundering and cyber fraud. Therefore, the regulator urged customers to keep their accounts active and regularly update KYC details.
To prevent closure, the RBI advised account holders to conduct at least one transaction, such as a small deposit or withdrawal. Even a minor digital payment through UPI or an ATM withdrawal can reactivate an account.
Customers were also advised to visit their respective bank branches and verify whether their KYC information remained updated, officials said.