What changed
Previously, savings accounts for scholarships and DBT credits were classified as dormant if inactive for two years, causing payment failures. Now, RRBs must create a distinct product code for these accounts so the dormancy rule does not apply when crediting such proceeds. Banks must still verify transaction genuineness without inconveniencing customers.
What it means for you
This change ensures seamless flow of government benefits and scholarships to beneficiaries, reducing administrative friction for RRBs and governments. Banks must update CBS systems to tag these accounts correctly, balancing operational ease with fraud prevention through signature and identity checks.
What you must do
- Assign a unique product code in CBS for accounts receiving DBT, EBT, or scholarship credits.
- Ensure these accounts are not marked dormant/inoperative solely due to lack of customer-initiated transactions.
- Implement due diligence checks (signature, identity, transaction genuineness) for any operations on these accounts.
- Avoid causing inconvenience to customers while applying safeguards.
Who it affects
Regional Rural Banks (RRBs), Government departments handling DBT and scholarships, Beneficiaries of Central/State government schemes and students
What types of accounts are exempted from the dormancy rule?
Zero-balance accounts and accounts opened for beneficiaries under Central/State government schemes, including those for DBT, EBT, and scholarships, are exempt when crediting such proceeds.
Do we still need to monitor these accounts for fraud?
Yes, RRBs must exercise due diligence by verifying signatures, identities, and transaction genuineness, but without inconveniencing the customer.
When does this circular take effect?
The circular was issued on October 4, 2013, and is effective from that date. RRBs were advised to implement it immediately.