RRBs: New Product Code for DBT & Scholarship Accounts
Current · Source: Reserve Bank of India · RBI/2013-14/312 · issued 04 Oct 2013 · ~1 min read
Quick answerRBI directs RRBs to assign a separate product code in CBS for zero-balance accounts used for DBT, scholarships, and government scheme credits, exempting them from the two-year dormancy rule while requiring due diligence on transactions.
The rule, in the simplest words
RRBs must assign a separate product code in CBS for zero-balance accounts used for DBT, scholarships, and government scheme credits.
These accounts are exempt from the two-year dormancy rule, but banks must still verify transaction genuineness without inconveniencing customers.
Banks must update CBS systems to tag these accounts correctly, balancing operational ease with fraud prevention through signature and identity checks.
How it plays out — a real example
When a student in Indore receives a scholarship, the payments & clearing officer must ensure that the account is tagged correctly in the CBS system to avoid dormancy and facilitate smooth crediting of the scholarship amount. The officer must also verify the student's identity and signature to prevent fraud, all while ensuring that the student is not inconvenienced in the process.
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
❓ Common questions
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.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/312
RPCD.CO.RRB.BC.No.41/03.05.33/2013-14
October 4, 2013
The Chairmen
Regional Rural Banks
Dear Sir/Madam,
Unclaimed Deposits/Inoperative Accounts in Regional Rural Banks -
Treatment of certain savings bank accounts opened for credit of Scholarship amounts and credit of Direct Benefit Transfer under Government Schemes
Please refer to circular RPCD.CO.RRB.BC.No.108/03.05.33/2008-09 dated May 22, 2009 on unclaimed deposits/inoperative accounts wherein Regional Rural Banks were advised that a savings or current account should be treated as inoperative/dormant if there are no transactions in the account for over a period of two years and the safeguards to be adopted in dealing with such accounts.
2. State and Central Governments have expressed difficulties in crediting cheques/Direct Benefit Transfer/Electronic Benefit Transfer/Scholarships for students etc. into Zero Balance Accounts and accounts opened for the beneficiaries under various Central/State Government schemes but had been classified as dormant/inoperative due to non-operation of the account for over two years.
3. Keeping the above in view, Regional Rural Banks are advised that they may allot a different ‘product code’ in their CBS to all such accounts opened by banks so that the stipulation of inoperative/dormant account due to non-operation does not apply while crediting proceeds as mentioned in para 2 above.
4. In order to reduce the risk of fraud etc., in such accounts, while allowing operations in these accounts, due diligence should be exercised by ensuring the genuineness of transactions, verification of signature and identity, etc. However, it has to be ensured that the customer is not inconvenienced in any manner.
5. Please acknowledge receipt to our concerned Regional Office.
Yours faithfully,
(A.Udgata)
Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/312 · issued 04 Oct 2013. The plain-English explanation above is BankPulse’s own independent summary.
Implement due diligence checks (signature, identity, transaction genuineness) for any operations on these accounts.
📜 Compliance
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.
Avoid causing inconvenience to customers while applying safeguards.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (Regional Rural Banks (RRBs), Government departments handling DBT and scholarships, Beneficiaries of Central/State government schemes and students), your first concrete step on “RRBs: New Product Code for DBT & Scholarship Accounts” is: “Assign a unique product code in CBS for accounts receiving DBT, EBT, or scholarship credits.” (RBI issued this 04 Oct 2013).
Circular: RBI/2013-14/312 -- RRBs: New Product Code for DBT & Scholarship Accounts
Issued: 04 Oct 2013
Action required: Assign a unique product code in CBS for accounts receiving DBT, EBT, or scholarship credits.
Action required: Ensure these accounts are not marked dormant/inoperative solely due to lack of customer-initiated transactions.
Action required: Implement due diligence checks (signature, identity, transaction genuineness) for any operations on these accounts.
Action required: Avoid causing inconvenience to customers while applying safeguards.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8490&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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