What is a Dormant NRI Account? Here’s Everything You Need to

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When a bank account has no customer-initiated transactions for a period exceeding one year, it is categorized as “Inactive.” According to the guidelines established by the Reserve Bank of India (RBI), if the account continues to have no such transactions for over two years, it is then classified as “Dormant” or “Inoperative.”

A few of the key features of a dormant NRI account are:

Inactivity: The account has remained idle without any financial activity for a set period.

Freezing: To safeguard against unauthorized access, the bank may freeze or restrict the account, limiting transactions.

Non-Interest bearing: A dormant account typically does not earn any interest during the period of inactivity.

Notification: Banks usually notify account holders at their registered address, alerting them about the account’s dormant status.

Furthermore, allowing your account to become dormant can lead to various inconveniences. For instance, you may be unable to write cheques, renew your ATM or debit card, update your registered address, or perform transactions using an ATM, internet banking, or phone banking. Essentially, having your account marked as inoperative can significantly restrict your access and make managing your savings account more challenging.

Continue reading to know about these consequences in detail.

Consequences of a Dormant NRI Bank Account

While having your NRI bank account turn inactive can be quite inconvenient, the complications become even more serious when it transitions to dormant status. Below are some possible consequences you could face:

• Cheque books and other deliverables will not be issued for a dormant account, meaning you will lose the ability to make payments or manage expenses via cheques.
• Debit cards will not be renewed once they expire, which means you won’t have access to your funds for everyday purchases and transactions.
• Updates to correspondence details, such as your address, phone number, or email, will not be possible, making it difficult to receive important communications from the bank.
• Transactions through ATMs, internet banking, or phone banking will be severely restricted, preventing you from accessing your funds when you need them most.
• Regular account maintenance fees may still be applied, even if the account is dormant, leading to unnecessary deductions from your balance.
• Dormant accounts may be at a higher risk of misuse or fraudulent activity, putting your hard-earned money in jeopardy if the account is not actively monitored.
• When you eventually wish to use the account again, accessing it can become a significant hassle, requiring additional steps and documentation that can be time-consuming and frustrating.

In essence, a dormant NRI bank account may offer little practical value and can create unnecessary complications. Therefore, if you discover that your account has become dormant, it’s crucial to understand the steps needed to reactivate it and regain full access to your funds and banking services.

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Steps to Reactivate a Dormant DBS Bank Account

To reactivate an inactive account, you’ll need to complete and submit an application to your bank, detailing the reasons for the inactivity. Be prepared to visit the bank in person with valid proof of identity and address.

According to RBI guidelines, there are no fees for reactivating a dormant account. However, to ensure regulatory compliance, the bank may ask for updated Know Your Customer (KYC) documents. To finalize the reactivation, visit your nearest DBS branch and provide self-attested copies of the required KYC documents.

• A recent passport-size photograph
• Your PAN Card or Form 60
• One of the following Official Valid Documents (OVD):
  a) Aadhaar

1. b) Passport
2. c) Driving License
3. d) Voter ID

To locate the nearest DBS branch, click here.

If you don’t provide the necessary documents, your account will stay frozen, restricting you from making transactions or using your debit card for any purchases.

Conclusion

Reactivating your dormant NRI account is a simple process. It typically requires contacting your bank, updating your information, completing any required forms, and making a transaction. To avoid future dormancy, it’s important to regularly monitor your account and ensure your contact details remain current.

Keep in mind that dormant accounts can lead to inconveniences, such as the loss of interest or, in some cases, escheatment. Therefore, keeping your NRI account active and easily accessible is always in your best interest.

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*This article is for information purpose only and is not a tax advice by DBS Bank. Sound professional advice should be taken before making any investment decisions. Bank will not be responsible for any tax loss/other loss suffered by a person actng on the above.

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