Sample Letter to Activate Dormant Account
What is the difference between an inactive and a dormant account? Want to reactivate your SBI or Bank of Baroda or ICICI or HDFC or any other bank's dormant account? This article explains how an inactive account differs from an inoperative/dormant account and also provides a Sample letter to activate dormant account.
You open a bank account and it is possible that for some reason you do not use it for nearly a year, with no transactions occurring through it. You then decide you require to use that account but find that the bank has declared it as dormant. Not to worry! You can easily activate it again within twenty-four hours by following the requisite procedures, supported by a strong application request letter to activate dormant account.
What is a dormant account
When your account becomes inoperative with no transactions for the duration of 2 years or more and goes into hibernation so to say, then the account is considered to be dormant. The Bank is basically safeguarding its own interests to prevent fraud when a customer's account is no longer operative. This applies to both savings and current accounts. Note that there is a difference between an inoperative bank account and an inactive account. An account will be declared inactive by the bank if there is no transaction in the account for the duration of 1 year.An account is not declared dormant if there is any account holder-induced transaction. This includes:
- Credit Transactions:
- Fixed Deposit interest credits
- Dividends from shares held in a Demat account
- Cash deposits
- Clearing deposits
- NEFT credits or other online credits
- Debit Transactions:
- Debiting of interest in the account
- Debiting of charges from the account
- Online payment of a bill
What the Bank does for dormant accounts
The bank will contact the account holder and alert him about there being no transactions of the account. This communication will be done 3 months prior to declaring the account to be dormant. The account holder can give a reason as to why the account was inoperative.If the account holder gives a valid reason for not operating the account, then the bank can consider the account to be operative for one more year, during which time the account holder will be instructed to operate the account. If during this time, however, the account holder does not do so, then the bank will declare the account to be dormant at the end of that extended one year.
Further, unknown to the account holder, the account may likely be placed under what is known as "Suspicious Transactions Report" and the Bank will do an audit of the amount in the inoperative account. The Bank also does not allow the account holder to withdraw cash from an ATM, avail of Net or phone banking facilities, receive a new cheque book and avail of other services which are generally associated with an operative account.
Note that, as per RBI rules, the interest on the savings account of the account holder must be credited by the Bank regularly even if the account is inoperative. In the case of a Fixed Deposit maturing and the proceeds remaining unpaid, the unclaimed amount with the bank will accrue the savings bank rate of interest.
What the Bank does for activation of a dormant account
When a dormant account is activated after due diligence by the Bank, the bank cannot put any charges on the account holder for the activation process.Naturally, the Bank will consider the risk involved in activating the account and re-verify the identity of the account holder through the KYC (Know Your Customer) procedure.
How to activate a dormant account
You need to visit the bank in person (some banks do provide online facility for NRI customers) and do 3 things to restart your dormant account:- Submit an application with reasons for not having any financial transactions in the account
- Submit the following self-attested documents:
- A photocopy of ID proof
- A photocopy of address proof
- A photocopy of your passbook which is of that account
- A photocopy of your cheque book which is of that account
- Deposit into or withdraw money from the account as per the amount which the Bank tells you (likely it will be minimum Rs.500/.) Note that if your cheque book is over, you will not be issued a new cheque book to do a withdrawal transaction.
It will take about one working day to get your dormant account reactivated.
Sample letter to activate dormant account
Here's a sample letter, let's say to SBI, Adyar branch, Chennai, in case they do not have any prescribed form. You can consider this same letter for making an application to any bank in which you would like to activate your dormant account.
To: The Branch Manager
SBI
Kasturba Nagar,
Adyar - 600020
Chennai
Subject: Request for Activation of my Dormant Account no. ___________
Sir/Madam,
My above mentioned [savings/current] account is in dormant status. The reason for dormancy of the account is [give the details here].
I request you to please reactivate the account. I am enclosing the list of documents on the basis of which the account can be reactivated.
The Account Number is: __________________
Documents enclosed with this application are:
1. A self-attested copy of my photo ID Proof of [mention what type it is, such as PAN card or Driving license] and 2 passport size photos.
2. A self-attested copy of my address [mention what type it is, such as your Aadhaar card]
3. A self-attested copy of my account passbook
4. A self-attested copy of my cheque book
5. A cheque for Rs. __________/- drawn on ________________Bank, ____________branch to be deposited in my dormant account [mention account number again here]
6. Cash for Rs. __________/- deposited in my dormant account.
Please do the needful and reactivate the account at the earliest.
Thanking you,
Yours Sincerely,
[your signature]
[your name]
[your address]
[your phone number(s)]
[your email ID]
Note: (i) In the sample letter, write #5 or #6 as applicable. (ii) Find out how many passport size photos you need to submit.
Additional notes
- At the bank's site, there will be a List of unclaimed / inoperative Accounts. You can check the list in case you have not used your account since over one year.
- In case the account is operated by more than one person, then the signatures of all the account holders would be required to be put in the letter and the requisite documentary proof of all of them would likely have to be submitted too.
- In case you are unable to either deposit money by cheque or with cash, then at least one other type of financial transaction must be done to reactivate the dormant account. For example, this could be a Fixed Deposit credit (you can ask the bank what type would be admissible.)
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I found the sample letter on how to activate dormant account very helpful to understand the mode of proceeds related to SBI matters.