Circumstances Leading To Closure of Bank Accounts
Previously we learned that DICGC is there to safeguard any loss faced by our banks. But to keep things under check, we also need to be careful. Under normal circumstances, banks will not close any bank account or deposit account. However, the following are some of the circumstances which may lead to such closure that we must avoid.
So, what are they?
Inadequate Know Your Customer (KYC) Documents
It is a customer’s duty to submit up to date documents to banks when asked for. In case the documents are not up to date and even after repeated follow-ups the customer has not submitted relevant documents, then the bank may close an account.
Dormant or Inactive Account
While banks maintain an account, it is the responsibility of the customer to transact in the account and keep it active. In case an account is dormant or inactive and the bank has sent repeated requests to the customer to activate the same, the bank can close an account.
Banks make every effort not to close any account since they value their customers. However, each bank reserves a right to choose their customers, and hence any kind of illegal activity might lead to the closure of an account. In January 2019, an Indian bank closed the account of one of its customers after it was found that the customer had been dealing in Cryptocurrencies. However, things are now much clearer with the introduction of the Crypto Bill in Lok Sabha in the year 2022.