PNB account holders, beware: Your inactive a/c will be closed from June 1

Do you or your family members have an account with Punjab National Bank (PNB) that has been inactive for years? If you plan to use the account in the future, it's important to act now. Here's why:

PNB has announced that it will close accounts with no activity for the past three years and no balance, unless the Know Your Customer (KYC) process is completed by May 31, 2024. After this date, no further notice will be given to account holders.

Which PNB accounts will be closed?

Accounts that have been inactive for over three years as of April 30, 2024 and have a zero balance will be closed.

When will the accounts be closed?

Inactive accounts will be closed on June 1, 2024.

Which PNB accounts are not impacted?

The following accounts are exempt from closure:

- Accounts linked to DEMAT accounts, lockers, or active standing instructions

- Student accounts for customers under the age of 25

- Minor accounts

- Accounts opened for specific schemes like PMJJBY, PMSBY, SSY, APY, DBT

- Accounts frozen by court orders, income tax department orders, or other statutory authorities
 

What can you do if your PNB account is closed?

If your account is closed, you can reactivate it by submitting the necessary KYC documents to your nearest bank branch. To prevent account closure, ensure you submit the documents by May 31, 2024.

Required documents

To complete the KYC process, you will need:

1. Identification Proof (PAN Card, Aadhar Card, Passport, Driving Licence)

2. Address Proof (Aadhar Card, Electricity Bill, Water Bill, House Tax receipt, etc.)

Why is PNB closing these accounts?

PNB is taking this measure to avoid security risks and ensure that inactive accounts are not misused.

How can inactive accounts be a security threat?

Inactive accounts are those that have not been used for a long time. Adhil Shetty, CEO of Bankbazaar.com, highlights the risks associated with dormant bank accounts. He notes, "In the past, there have been attempts where fraudsters tried to withdraw money from dormant accounts by manipulating data, using fake KYC details, and activating these accounts with false phone numbers to access funds but have been caught in the process."

Shetty also points out the dangers of identity theft: "Dormant account information, if compromised, can be used for identity theft, leading to financial losses for the account holder and potential damage to their credit score. It is essential to understand that you must either keep your bank account activated or close it with the proper banking process to avoid any misuse by scamsters."

Fraud exposure: Unused bank accounts can become prime targets for fraud.

Avoidance of fees: Many banks charge maintenance fees for inactive accounts.

Unauthorised access: Inactive accounts are more vulnerable to hacking and unauthorised access, especially if they are not regularly monitored.

Identity theft: Inactive accounts may contain personal information that could be exploited by identity thieves.

Unauthorised transactions: Neglected accounts are more susceptible to fraudulent transactions.

In October 2023, the Finance Ministry suggested tighter cyber norms, including the closure of 'mule' and inert bank accounts. These accounts are often bought by fraudsters from their original users and are used to deposit money obtained through online scams. The Finance Ministry said that such accounts often form the foundation for fraudulent activities.

Safeguards by the Reserve Bank of India (RBI)

If you have money in your account and it is inactive, your money will be safe as RBI has implemented measures to prevent fraud and protect account holders, Shetty explained. These measures include:

Periodic reviews: Regular checks to monitor dormant accounts and prevent fraudulent activities.

Grievance redressal mechanism: A system for the quick resolution of complaints related to dormant accounts.

Customer tracing: Steps to trace customers of inoperative accounts or unclaimed deposits, including their nominees or legal heirs, to reactivate accounts, settle claims, or close accounts properly.