SBI Seeks Rule Change for Active Accounts Amid Dormancy Concerns

The State Bank of India has requested the Reserve Bank to include non-financial transactions, like balance checks, in criteria for operative accounts. Chairman C S Setty highlighted issues with accounts becoming dormant due to limited financial activity, impacting government program beneficiaries. SBI aims to address dormant accounts through outreach strategies.

The State Bank of India (SBI) is advocating for a change in banking regulations to prevent accounts from being deemed dormant. Chairman C S Setty revealed that many accounts, especially those used primarily for government transfers, often become inactive due to limited financial transactions.

SBI has approached the Reserve Bank of India (RBI) to consider non-financial activities, such as balance inquiries, as indicators of account usage. The current system largely focuses on financial transactions, leading to numerous accounts being classified as inoperative, according to Setty.

To address this, SBI is deploying its extensive branch network and business correspondents to reach affected customers. The initiative aligns with the RBI's recent directive urging banks to resolve the issue of frozen accounts and submit progress reports quarterly.

(With inputs from agencies.)