For Non-Resident Indians (NRIs), maintaining a bank account in India is a common practice. NRIs maintain NRE/NRO bank accounts to serve various purposes, including managing savings, investments, and transactions back in India. However, over time, NRI accounts can become dormant due to inactivity. In this blog, we’ll explore the meaning of NRI dormant accounts and provide a step-by-step guide on activating an NRI dormant account and the difference between an inactive account and a dormant account.
SBNRI is a business partner of leading Indian banks. An NRI can apply for an NRE/ NRO account with one of these Banks by clicking the button below.
What is an Inactive NRI Account?
If you do not use your NRI account for more than 12 months, then your account will be considered an inactive account.
What is a Dormant NRI Account?
As per the mandate of the Reserve Bank of India (RBI), if your NRI bank account does not have any transactions in the last 24 months then it shall be classified as a dormant account. It is to be noted that transactions here include activities like cash withdrawal, transferring funds, paying with cheques, and more. It does not take into account the interest earned so if your account is inactive and you’re availing only interest debit/credit then the NRI bank account will still be classified as a dormant account.
Also read: NRI Accounts: Which one to choose? NRE or NRO?
What happens to a NRI Dormant or Inactive Bank account?
Once your NRI bank account becomes inactive or dormant, then you won’t be able to avail of services like Internet banking, request for debit cards, cheques, and other banking transactions. Additionally, services like ATM transactions, internet banking, and phone banking also become unavailable.
Understanding NRI Dormant Accounts in Detail
A dormant account, be it for an NRI or a resident Indian, is an account that has seen little or no financial activity over a specified period. This period typically ranges from one to three years, depending on the bank’s policy. Dormancy arises when the account holder fails to make any transactions, such as deposits, withdrawals, or fund transfers.
The key characteristics of an NRI dormant account include:
- Inactivity: The account has not witnessed any financial transactions for a specific duration.
- Freezing: The bank may freeze or restrict access to the account to prevent unauthorized withdrawals.
- Non-Interest Bearing: While the account remains dormant, it may not accrue interest.
- Notification: Banks often send notifications to the account holder’s registered address, informing them of the account’s dormant status.
It’s essential to understand that dormant accounts can lead to various inconveniences, including the inability to access funds or accumulate interest. Therefore, it’s vital to reactivate your NRI account if it becomes dormant.
Also read: 11 Best NRE Accounts in India for NRIs 2023: Online Application
How to Activate your NRI Dormant Bank Account?
Reactivating an NRI dormant account involves a few straightforward steps:
1. Contact Your Bank
- The first step is to reach out to your bank. You can visit your local branch if you’re in India, or if you’re abroad, you can contact the bank through their NRI services helpline or email. Inform them about your dormant account and express your intention to reactivate it.
2. Verify Your Identity
- To ensure the security of your account, the bank may require you to provide identification and proof of your NRI status. This typically involves submitting a copy of your passport, visa, and other relevant documents.
3. Update Contact Information
- If your account went dormant due to outdated contact information, make sure to update your address, phone number, and email with the bank. This will ensure you receive future notifications and account updates.
4. Complete Necessary Forms
- The bank will provide the required forms to reactivate your NRI account. Fill them out accurately and provide any additional information or documentation as requested.
5. Make a Transaction
- To reactivate your account, make a financial transaction. This can be a deposit, withdrawal, or transfer. The bank may specify a minimum amount that must be transacted to consider the account active again.
6. Confirmation
- Once the necessary steps are completed, your bank will review your request. After verifying your details and transaction, they will confirm the reactivation of your NRI account. You should receive a notification or statement reflecting the change in the account’s status.
7. Regularly Monitor Your Account
- To avoid future dormancy issues, it’s crucial to keep your NRI account active by conducting periodic transactions, checking your balance, and promptly responding to any communication from the bank.
Remember, all the banks have a different approach to it and can require a few more documentation or procedures from the above-mentioned pointers. It is best advised to contact the customer service of your bank account and follow the procedures.
Wrapping Up
Reactivating your NRI dormant account is a relatively simple process that involves contacting your bank, providing updated information, completing necessary forms, and making a transaction. Regularly monitoring your account and keeping your contact details up-to-date are essential to prevent future dormancy issues.
Remember, dormant accounts can lead to inconvenience, loss of interest, and even escheatment in some cases, so it’s in your best interest to keep your NRI account active and accessible.
Connect with SBNRI to resolve your NRI Banking Issues
Due to lots of information and documentation required to apply for NRI Bank accounts, the account opening process is lengthy and cumbersome elsewhere with lots of hassle. You can download SBNRI App to apply for an NRI Bank account with nominal documentation and also resolve your queries regarding NRI banking in just 10 minutes.
You can also click on the button below to apply for an NRI account. Also, visit our blog and YouTube channel for more details.
FAQs
Can I open NRI account online?
- You can apply for an NRI account opening online through a bank’s website. Fill out the account opening form online and upload the scanned documents. The NRI account opening process varies from bank to bank. Alternatively, you can download the SBNRI app to apply for an NRI account opening online.
Can I activate my NRI dormant account online?
- Yes, you can activate your dormant NRI account online by contacting your bank customer care and following the procedures mentioned to activate your NRI dormant or inactive bank account.
What will happen if I don’t activate my NRI dormant or inactive account?
- Once your NRI bank account becomes inactive or dormant, then you won’t be able to avail of services like Internet banking, request for debit cards, cheques, and other banking transactions. Additionally, services like ATM transactions, internet banking, and phone banking also become unavailable.
Can I invest in Indian markets with an NRI dormant bank account?
- No, you cannot invest in Indian markets like mutual funds, government securities, bonds, and other schemes with a dormant or inactive NRI bank account. You need to activate your dormant account or open a new NRI bank account to invest in India.
How can I open an NRI account in UAE?
- If you are in India, you can visit a bank in India to open an NRI account. To open an NRI account online, you can download SBNRI App or visit SBNRI.com and apply for the account seamlessly.
Which is the best bank for an NRE account?
- Some of the well-known banks in India that offer NRE accounts include State Bank of India (SBI), ICICI Bank, HDFC Bank, Yes Bank, and Kotak Mahindra Bank. These banks have a significant presence and offer a range of services tailored to NRIs (Non-Resident Indians).
