What Are Dormant Bank Accounts?
With the RBI’s deadline on unclaimed deposits approaching quickly, fast dormant account reactivation becomes an extremely important step for banks to get done with. A dormant bank account is an account that has not seen any customer-initiated activity, such as deposits, withdrawals, fund transfers, or cheque processing, over a prolonged period. Typically, banks classify an account as dormant after 12 months of inactivity, though this period can vary by bank policy.
According to the Reserve Bank of India (RBI), if an account remains dormant for two years or more, it is officially designated as “inoperative.” The reasons for inactivity can be many, including the account holder forgetting about the account or simply not using the account for regular transactions. When accounts become dormant, they lose several operational capabilities, such as online banking access, ATM transactions, and even cheque functionality, leaving customers unable to utilise their funds.
While dormant accounts often sit untouched, they can cause operational challenges for both the customer and the bank. For customers, the inconvenience of reactivating an account can deter them from accessing their funds, while banks face regulatory and customer service burdens in managing dormant accounts.
RBI Guidelines On Unclaimed Deposits
The RBI has set clear guidelines on the treatment of dormant accounts and unclaimed deposits. According to RBI regulations, any account that has remained dormant for 10 years or more is classified as an unclaimed deposit. These funds are then transferred to the Depositor Education and Awareness (DEA) Fund, a special account set up by the RBI.
Once funds are transferred to the DEA, the original account holder, or their legal heirs, can still claim the money. However, the process to retrieve the funds from the DEA can be complex and time-consuming, often requiring formal documentation and approval. To avoid such situations, RBI encourages banks to re-engage account holders and reactivate dormant accounts well before the 10-year mark.
RBI’s guidelines also stress that banks should take steps to remind customers about dormant accounts. For instance, banks are required to send periodic notices to customers whose accounts are nearing dormancy, reminding them to initiate transactions to keep the account active. This proactive communication is vital in preventing the account from being classified as dormant, and it helps ensure that funds are not unnecessarily transferred to DEA.
How To Reactivate Dormant Accounts Easily?
Reactivating a dormant account can be a simple process if the correct steps are followed. For banks, the primary challenge lies in ensuring that the account holder is still the rightful owner of the account and that their contact details are up-to-date.
In the past, reactivating dormant accounts often required customers to visit the branch in person, undergo KYC (Know Your Customer) checks, and update their contact details. The process was typically cumbersome, especially for individuals who had moved to a different location or were unable to visit the bank during business hours.
However, with advancements in technology and regulatory changes, the reactivation process has been streamlined. Banks now allow customers to reactivate their dormant accounts remotely through video-based KYC (V-CIP) or by updating contact details online. These changes have made it significantly easier for customers to regain access to their funds without the need for in-person visits, and banks can verify account holders’ identities securely from a distance.
Steps for Reactivation:
- KYC Update: The first step in the reactivation process is updating the KYC details. Customers are typically required to submit government-issued ID proofs, address proof, and a photograph. In some cases, this process can be completed remotely using video-based verification (V-CIP), where the customer appears in a live video to confirm their identity.
- Contact Point Verification (CPV): As part of the KYC process, banks also verify the account holder’s contact points. This could include validating their mobile number, email address, and residential address. CPV is now an essential part of reactivating dormant accounts, as it ensures that the bank has the correct and updated contact information for the customer.
- Bank’s Approval: Once the KYC update and CPV checks are completed, the bank processes the request for reactivation, and the account is returned to active status. The customer is then notified, and the account becomes fully functional once again.
How Can Banks Expedite Dormant Account Reactivation Using AuthBridge’s CPV Solution
GroundCheck.ai, India’s first AI‑powered Contact Point Verification (CPV) platform developed by AuthBridge, provides a modern alternative that transforms dormant account reactivation into a smart, scalable, and secure workflow.
1. Real‑Time, Risk‑Aligned Contact Validation
GroundCheck.ai does more than just confirm if a phone number or email exists. It uses an AI‑powered engine to validate contact points and geographical presence with sophisticated checks, such as:
- Geolocation and GPS triangulation to ensure the customer’s claimed address matches real‑world coordinates.
- Face match and liveness detection during remote verification steps to confirm the account holder’s identity.
- Dynamic, risk‑aligned workflows that adjust the depth of verification based on the specific profile of each dormant account.
For a bank, this means that reactivation verification becomes automated, risk‑tiered, and precise, reducing false positives and unnecessary steps for low‑risk accounts, while focusing effort where it counts. When banks can verify contact points instantly, dormant accounts that might otherwise stagnate begin moving again.
2. Pan‑India Coverage with Seamless Scalability
One of the persistent challenges in dormant account workflows is geographic diversity. In India, customers might be located in dense urban zones or remote rural regions where physical branch access is limited. GroundCheck.ai’s platform overcomes this by providing verified field support across 20,000+ PIN codes, meaning that whether the account holder lives in a major city or a semi‑urban setting, contact point and address verification can be completed efficiently.
For banks, this means low turnaround times even in low‑connectivity areas, enabling dormant accounts to be reactivated without forcing customers to travel or delay their requests.
3. Integrated Digital and On‑Ground Verification
GroundCheck.ai unifies digital address verification, remote identity checks (V‑CIP), and on‑ground presence validation into a cohesive workflow. For example:
- If a customer’s mobile number and email are verified instantly via digital channels, the platform may complete reactivation without any additional steps.
- If digital checks are inconclusive or a higher risk is detected, an agent with geo‑tagged tools can perform an on‑ground verification automatically—without requiring the customer to visit a branch.
This adaptive verification journey ensures that banks can handle high volumes of dormant accounts with minimal manual intervention, while maintaining the integrity of KYC and regulatory compliance.
4. Audit‑Ready Records and Compliance Confidence
Each verification event through GroundCheck.ai generates a digital audit trail: geo‑tagged reports, timestamps, photo evidence and system logs that document each step of the verification. This is critical for:
- RBI compliance checks,
- Internal audit requirements,
- Risk management assessments,
- Operational transparency.
By embedding compliance documentation directly into the reactivation workflow, banks reduce the risks of regulatory pushback and improve stakeholder confidence in their dormant account management processes.
5. Faster Turnaround, Reduced Operational Cost
Traditional dormant account reactivation poses cost and time challenges:
- Branch visits require staff time,
- Paper‑driven KYC creates filing and tracking overhead,
- Postal and telephonic follow‑ups introduce delays.
GroundCheck.ai eradicates these bottlenecks by enabling digital, remote and on‑ground CPV in a unified platform that operates at scale. Banks that deploy GroundCheck.ai can expect:
- Quicker reactivation times (hours instead of days/weeks),
- Lower staff overhead due to automation,
- Fewer failed reactivation attempts due to out‑of‑date contact points,
- Higher customer satisfaction through seamless reactivation experiences.
6. Enhanced Risk Management
Beyond strictly dormant account reactivation, the same CPV capabilities can support portfolio risk profiling. Accounts flagged for higher risk—such as those with long periods of dormancy, inconsistent contact details, or previous fraud flags—can be routed through deeper, AI‑guided verification steps, ensuring that security and compliance do not lag as banks streamline operations.
Traditional vs AI-Driven CPV For Dormant Account Reactivation
To better understand the benefits of AuthBridge’s GroundCheck.ai solution for dormant account reactivation, here’s a comparison between traditional verification methods and AI-driven CPV.
Aspect | Traditional Method | AI-Driven CPV (GroundCheck.ai) |
Verification Method | Manual KYC updates, physical address verification, and paper documentation | Real-time contact point validation via SMS, email, OTP, and geolocation |
Speed | Slow—can take days or weeks, especially for rural areas | Near Instant—completed within hours or minutes |
Customer Convenience | Requires a branch visit, physical documents, or phone calls | Remote KYC (V-CIP), digital self-service, and video verification |
Geographical Coverage | Limited to areas with branch presence | Pan-India, including remote and rural locations (20,000+ PIN codes) |
Fraud Prevention | Manual checks increase human error and fraud risk | AI-powered fraud detection, liveness detection, geo-tagging, and photo validation |
Audit and Compliance | Physical paperwork or manual tracking logs | Automated audit trail with geo-tagging, timestamped records, and secure logs |
Cost Efficiency | High operational costs due to manual verification and branch involvement | Significant cost reduction with automation and remote verification |
Scalability | Difficult to scale—requires more personnel for increased volume | Scalable solution, capable of handling thousands of accounts simultaneously |
Conclusion
Reactivating dormant accounts no longer has to be a cumbersome, time-consuming process. With AuthBridge’s GroundCheck.ai, banks and financial institutions can harness the power of AI-driven CPV to streamline dormant account verification, enhance customer experience, and ensure compliance with RBI regulations. The platform’s real-time contact point validation, remote verification capabilities, and fraud detection mechanisms offer a faster, more secure, and cost-effective way to handle dormant accounts, which ultimately benefits both the bank and the customer.
Whether it’s through automated address verification, video KYC, or AI-powered fraud prevention, GroundCheck.ai equips banks with the tools they need to optimise dormant account management, reduce operational overheads, and ensure a seamless reactivation experience for account holders.
For banks looking to take their dormant account reactivation process to the next level, GroundCheck.ai offers the future of verification technology, today.
