According to RBI rules, current or savings accounts in which no transactions have been made by the customer for two years are considered dormant accounts. Such accounts are classified separately to prevent misuse. Banks are required to exercise special caution when handling transactions in these accounts. Before classifying an account as dormant, the bank must give prior notice to the customer.
If a fixed deposit is withdrawn before maturity, a penalty may be imposed. Each bank has the authority to decide the amount of this penalty. Generally, the bank pays interest at a rate 1–2% lower than the rate applicable on the date of deposit receipt, for the actual period the deposit remained with the bank....(To continue, open the magazine)