An account will be classified as Unclaimed account in case there is no transaction in the account for a period of........... Years
A5 years
B8 years
C10 years
DNone of the above
Answer:
C. 10 years
Read Explanation:
- According to the Reserve Bank of India (RBI) guidelines, a savings or current account is classified as Inoperative or Dormant if there have been no customer-induced transactions for over 2 years.
- An account is specifically designated as Unclaimed when it remains inoperative for a period of 10 years or more.
- Banks are mandated to transfer the balances in such unclaimed accounts to the Depositor Education and Awareness (DEA) Fund, which is maintained by the RBI.
- Customer-induced transactions include activities such as financial debits, credits, fund transfers, or cheque clearing initiated by the account holder.
- Transactions initiated by the bank itself, such as the debit of service charges, interest application, or penalties, do not count toward preventing an account from becoming inoperative.
- The objective of the DEA Fund is to utilize the unclaimed funds for promoting depositor awareness and protecting the interests of depositors.
- Under the Banking Regulation Act, 1949, banks must regularly review their books to identify accounts that have not been operated upon for 10 years to ensure compliance with reporting requirements.