How to activate a Dormant Bank Account

A dormant or inactive account is an account where no financial activity has taken place for a set period. Once an account becomes inactive, it cannot be reactivated without the bank’s intervention. The government can claim the funds in the dormant account once it passes the dormancy tenure. You cannot withdraw any money from the dormant account without reactivating it. 

It is essential to understand when an account becomes dormant and what procedure is practiced by the bank before declaring an account inactive. This write-up provides insights into these details and also sheds light on how to activate a dormant account in the UAE.

Dormant Account Regulations Laid by the Central Bank of UAE

The Central Bank of UAE recently issued regulations for dormant accounts to manage and protect the funds in the banks. The following are the rules laid down for the same –

• Dormancy is applicable to all accounts - savings accounts, current accounts, call accounts, corporate savings, call, or current accounts, fixed deposit accounts, and investment accounts. 
• In the case of investment and fixed-term deposit accounts, if the account holder does not reactivate the deposit account or files a claim within 3 years from the maturity date, the account becomes dormant. 
• Several banks have decided to change an account’s status to dormant if the account is not operated for 1 year. Here, the authorised representatives connect with dormant account holders with an inactivity of 9 months and give them a grace period of 3 months to use the account for. If the account holder does not use the account, it is categorised as a dormant account. 
• If the account is not reactivated within 5 years, it is closed and the funds are transferred to the Central Bank of UAE.

When Does an Account Become Dormant?

A bank account becomes dormant under the following circumstances – 

• If the savings or current account is unused for 6 years (the transactions made by the bank are not included)
• If the renewable and non-renewable deposit accounts are non-operational for 5 years and 1 year respectively
• If the investment account is unused for 12 months from the maturity date

How Does a Bank Declare an Account to Be Dormant?

A bank declares an account as dormant through the following process – 

• Contacting the Account Holder – Within two months when the account lapses, the banks connect with the account holder. If the bank does not get any response, the account becomes dormant and a report is submitted to the Central Bank of UAE. 
• Contents Transition – Once the account is declared dormant, the Central Bank of UAE is notified, after which the content transfer process begins
• Creating Signature Card – The bank creates a signature card for the dormant account which prevents unauthorised access to the contents of the particular account 

Protecting the Documents – The bank ensures the utmost confidentiality of the account-related documents to minimise the possibility of fraud and misuse of the account contents

How Do Elements of a Dormant Account Work?

This section of the article discusses how the main components of a dormant account work –  

• Security Deposit Boxes – Even if the account has not been operated for a long time, the banks can maintain safe deposit box charges for more than 2 years. The contents of the box are maintained in the following way – 
• Transfer the contents to the Central Bank of UAE – If the bank cannot connect with the account holder after 3 months, the contents of the safe deposit box are transmitted to the Central Bank and cannot be accessed without proper authorisation.
• Make Appointment with the Court – To open the safe deposit box, the bank schedules a court appointment, prepares the list of the content in the box, and submits it to the Central Bank. If the court orders to sell some of the contents, the earnings of the sale are deposited in the Central Bank of UAE’s Unclaimed Balance Account. Before these proceeds are transferred to Central Bank, the bank deducts the charges.
• Create Reports – The bank prepares a report stating all the transfers and other contents of the bank account and inputs the information into its inactive account ledger. A copy of the same is shared with the Central Bank’s Department of Banking Supervision and Banking Operations.
• Interest – Even if dormant, the bank account will continue to accumulate interest on the balance maintained similarly as an active bank account does. 
• Funds – Account holders can claim and recover funds that they have left in the dormant account. In this case, the bank needs to settle the claims within one month and provide a logical reason in case of any delay.

What are Some Challenges the Dormant Account Holder Can Face?

These restrictions can be faced by dormant account holders – 

• No chequebook will be provided
• The address cannot be modified
• Signature Modification is not allowed
• No withdrawal from an ATM or branch is possible 
• The account holder cannot add or remove a joint account holder
• No transaction can be done via mobile or online banking
• ATM or debit card cannot be renewed
• The account holder cannot receive the user ID and password

Steps to Reactivate a Dormant Bank Account in the UAE

To reactivate your bank account, you need to complete the following process – 

• Submit all the necessary documents like Emirates ID, passport, or driving licence to confirm your identity as the account holder. Once your identity is verified, the bank will transfer the entire inactive account ledger value to the reactivated account.
• The banks do not charge any reactivation fees. Once the account is reactivated, the bank checks if the records are updated.
• In case the account holder does not connect with the bank for more than 7 years, the bank transfers the value of the account to the Central Bank of UAE’s Unclaimed Balances Account - Dormant Accounts department. Until the account holder files a claim, the Central Bank has the right to the bank account and its funds.

Frequently Asked Questions