Preamble:

The Policy on Inoperative accounts and Unclaimed Deposit (referred here as ‘Policy’) outlines the guiding principles and procedures put in place covering various aspects of classifying accounts and deposits as inoperative accounts and unclaimed deposits by Standard Charted Bank India (SCB/Bank).

Objective of Policy:

The objective of the policy is to put in place a framework for

1. Classification of inoperative / dormant accounts & unclaimed deposits
2. Efforts for activation
3. Grievance redressal mechanism for quick resolution of complaints related to inoperative account
4. Record keeping and periodic review of these accounts.

Scope of the Policy:

The policy covers guidelines and procedures for dealing with potential dormant accounts, inoperative accounts, and unclaimed deposits.

Some important Definitions:

Bank induced transaction:

Transactions in the account initiated by the bank as per its extant policy such as charges, fees, interest payments, penalties, taxes (an illustrative list is given in Annex I).

Customer induced transaction:

The transactions in account which are in the nature of:

• Financial transaction initiated by or done at the behest of the account holder by the bank/ third party (an illustrative list is given in II) or.
• Non-financial transaction, or.
• KYC updation done in face-to-face physical mode or through digital channels such as internet banking or mobile banking application of the bank. 

Financial transaction:

A monetary transaction in the savings/ current account of the customer with the bank either by way of a credit or debit transaction (refer Annexure II for list of transactions) 

Non-financial transaction:

An enquiry or request for any product/ service initiated by the account holder through any ATM or internet banking or mobile banking application of the bank or through Third Party Application Providers, which requires two-factor authentication (2FA) and leaves a trail for audit purposes or successful log-in to the internet banking/ mobile banking application. Illustratively, this includes transactions such as change in transaction limit, request for issue of cheque book/ credit card/ debit card, nomination facility, balance enquiry, etc. (refer Annexure III for list of transactions). Customer request (Service/Product) in person at branch and phone banking also will be considered.

Depositors’ Education and Awareness Scheme, 2014

In terms of announcement of Monetary Policy 2013-14 and pursuant to the enactment Of the Banking Laws (Amendment) act , 2012, Section 26A has been inserted in the Banking Regulation Act, 1949,which inter alia empowered Reserve Bank of India to establish The Depositor Education and Awareness Fund (the Fund)/(DEAF) . The Fund has been created and all banks (Scheduled Commercial Banks including Regional Rural Banks and Local Area Banks /Urban Co-operative Banks / State Co-operative Banks /District Central Co-operative Banks) who have been advised to transfer inoperative deposit accounts which have not been claimed or operated for a period of ten years or more or any deposit or any amount remaining unclaimed for more than 10 years to the Fund., Banks are required to transfer to the Fund the amounts becoming due in each calendar month (i.e. proceeds of the inoperative accounts and balances remaining unclaimed for ten years or more) as specified in the Scheme and the interest accrued thereon on the last working day of the subsequent month. The Fund shall be utilised for promotion of depositors’ interest and for such other purposes which may be necessary for the promotion of depositors’ interests as specified by the Reserve Bank from time to time. The depositor would, however, be entitled to claim from the bank his deposit or operate his account after the expiry of ten years, even after the unclaimed deposit funds have been transferred to the Fund. The bank would be liable to pay the deposit amount to the depositor and claim refund of such amount from the fund.

Classification of Inoperative/Dormant accounts & Unclaimed:

Inoperative/Dormant account:

A savings/ current account shall be treated as inoperative if there are no ‘customer induced transactions’ in the account for a period of over two years. For the purpose of classifying an account as ‘inoperative’, only ‘customer induced transactions’ and not bank induced transactions shall be considered. It is noted that customer mandate like Standing Instructions (SI)/ auto-renewal shall also be treated as customer induced transactions. The classification of an account as Inoperative/ Dormant will be assessed individually and only the particular account where has been no customer induced transactions for a period of two years.

Unclaimed account:

Current and Savings account where no customer induced transactions has taken place for last 10 years and Time Deposit or Other Credits which is not withdrawn in 10 years after its maturity date are classified as unclaimed deposits. The credit balance in any deposit account, which have not been operated upon for ten years or more, or any amount remaining unclaimed for ten years or more as mentioned the “Depositor Education and Awareness” (DEA) Fund Scheme, 2014

Guidelines/procedure to be followed for review, customer awareness and Treatment of inoperative/Dormant and unclaimed deposits accounts:

Review of Accounts

Bank will undertake an annual review in respect of accounts, where there are no customer induced transactions for more than a year.

Customer awareness & Inoperative account prevention process:

• Bank will inform the account/deposit holders via email or SMS (registered with the bank) or through letters, that there has been no operation in their accounts/deposits in the last one year.
• If the letters are returned undelivered, bank will make an enquiry to find out the whereabouts of customers or their legal heirs in case of demise of customers.
• In case any response is received from the account holder giving the reasons for not operating the account, the Bank shall continue to classify the account as operative for one more year and the account holder shall be advised to operate the account within a period of one year (herein after referred to as ‘extended period’). In case the account holder still fails to operate the account within the extended period, the Bank will continue to classify the said account as inoperative account after the expiry of the extended period.
• In cases where there is no explicit mandate to renew the term deposit, the Bank should review such accounts if the customers have not withdrawn the proceeds after maturity or transferred these to their savings/current account in order to prevent such deposits from becoming unclaimed.
• The Banks will provide on website as well as at their branches, the information on the process for activation of the inoperative account/ unclaimed deposits and claiming the balances therein. Necessary claim forms and documents may be made available for the benefit of customers.
• The banks will undertake awareness campaigns and financial literacy campaigns regularly to educate the customer about the activation of inoperative accounts/unclaimed deposits and the prescribed procedure to claim amounts, in case of deceased depositor.

Segregation and Audit & Treatment and Tracing of Inoperative Accounts/ Unclaimed Deposits

The segregation of inoperative accounts will be done to reduce the risk of frauds. The transactions in inoperative accounts, which have been reactivated, shall be monitored regularly, for at least six months, at higher levels/ central office.

The amounts lying in inoperative accounts/unclaimed deposits and reactivated inoperative accounts/ unclaimed deposits, is subjected to concurrent audit.

Payment of Interest:

Interest on savings accounts shall be credited on a regular basis irrespective of the status of account.

Levy of Charges:

Bank will not levy penal charges for non-maintenance of minimum balances in any account that is classified as an inoperative account and no charges shall be levied for activation of inoperative accounts.

Tracing of Customers of Inoperative Accounts/ Unclaimed Deposits:

• The Bank will contact the holder(s) of the inoperative account/ unclaimed deposit quarterly through letters, email or SMS (if the email and mobile number are registered with the bank). In case the whereabouts of the holder(s) of the inoperative account/ unclaimed deposit are not traceable, the Bank shall contact the introducer/Nominee, if registered, for tracing the customer.
• The bank will undertake special drives periodically to find out the whereabouts of the customers, their nominees or legal heirs in respect of inoperative accounts / unclaimed deposits.

Display of Inoperative/unclaimed accounts on Bank’s Website and Bank branch:

On Monthly basis the unclaimed deposit account data along with Unclaimed Deposit Reference Number (UDRN) will be upload in Bank’s official website and displayed at bank branch with required details specified by RBI.  The database of such ‘unclaimed account’ will be hosted on the Bank website and is provided with a search option to enable the customers to search for their unclaimed deposits using name in combination with the address of the account holder/ entity.  Necessary claim forms and documents will be made available for the benefit of customers at website and bank branch.

Preservation of Records & Prevention of customer data:

Notwithstanding anything contained in the Banking Companies (Period of Preservation of Records) Rules, 1985, the Bank shall preserve records / documents containing details of activation of such accounts/system logs etc (as may be applicable) as per the internal guidelines of the Bank.

The Bank adheres to the privacy and confidentiality obligation and has privacy standards to ensure there is no unauthorised access to customer data pertaining to the inoperative accounts. Steps are taken to prevent data theft and related misuse for fraudulent purposes.

Process of activating the inoperative account/claiming the unclaimed deposit.

• Operations in inoperative / dormant accounts may be allowed after due diligence as per risk category of the customer. Due diligence would mean ensuring genuineness of the transaction, verification of the signature and identity etc. However, it must be ensured that the customer is not inconvenienced as a result of extra care taken by the Bank. The Bank has made available the facility of updation of KYC for activation of inoperative accounts/ unclaimed deposits at all branches (including non-home branches) and through Video-Customer Identification Process (V-CIP) upon request from the customer. The V-CIP related instructions under Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016 (as updated from time to time) shall be adhered by the Bank.
• Customers can approach the branch along KYC documents i.e. latest Identity and Address Proof. A new account opening form will have to be completed at the branch with latest information of all account holders along with submission of an account reactivation request, self-attested KYC documents of all the account holders. In case customer wish to close the account, customer submit an account closure request signed by all the account holders along with the KYC documents. In case customer is a legal heir of the account holder, then customer may visit the branch along with the death certificate of the deceased account holder. Bank will assist with the deceased claim process.
• The Bank shall activate the inoperative accounts/ unclaimed deposits, including those which are under freeze by orders of various agencies like Courts, Tribunals, Law Enforcement Agencies, only after adhering to the KYC guidelines provided in the Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016 (as updated from time to time) such as Customer Due Diligence (CDD), customer identification, risk categorisation, etc.
• The bank shall intimate the inoperative account/ unclaimed deposit holders though SMS and registered email stating that on the basis of the KYC documents submitted by them, the inoperative status of the account has been removed.

Grievance Redressal Mechanism:

Customer query on inoperative accounts will be handled at Branch/Phone banking. Customer can send, call his/her complaint through email or physical letter or visit in person with full details on inoperative/unclaimed deposit/other credits account and its unique id number as the case may be and their identity proof.

Annexure I 

Annexure II

Annexure III