The Reserve Bank of India (RBI) has issued new guidelines that can completely change the banking industry in the country. This rule will come into effect from January 1, 2025, and three types of bank accounts will be deactivated. This is the most progressive step towards making the banking system safe, transparent and efficient. This is a step towards digital banking. According to the RBI, the removal of the three types of accounts will not only eliminate several deficiencies in the banking system but also the risks associated with them.

As per the new RBI rules, the three types of accounts that will become inoperative from January 1, 2025, are:

1. Inactive accounts - accounts that do not carry out any transactions for a long time. Any account that does not have a transaction within two years is generally called inactive.

2: Inactive Account: Defined as accounts that have not had any activity in a given period of time (most often 1 year)

3: Zero Balance Account - An account in which money is not deposited for a long time and has zero balance.

Objectives of the new rules

According to the Reserve Bank of India, there are several purposes for which such rules are required:

1. Increased financial security: With the closure of inactive accounts, the risks of fraud and abuse will be reduced.

2. Improving banking system efficiency: Banks will be able to work efficiently by closing unused accounts.

3. Promotion of digital banking: It will help customers in practical ways to switch over to the use of internet banking.

4. Adherence to KYC rules: The new rules will help in updating the KYC details of customers on a regular basis.