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Prolonged inactivity in a bank account renders it dormant, here inactivity refers to zero deposits and withdrawals including all types of banking transactions. This type of bank account is taken care of by the UAE Central Bank.
Recently, the Central Bank has introduced new set of rules to manage dormant bank accounts and their contents. In this post, we will walk you through everything that happens to a bank account once it’s dormant. You can also follow our simple guide to reactivate your dormant bank account and claim its content.
Bank accounts become dormant, when:
Here is a list of steps that UAE banks follow before filing a bank account as dormant:
The respective banks reach out to the account holder within two months of the account lapse. In case of no response, the banks categorise the account as dormant and send a report to the UAE Central Bank about the same.
The dormancy status is kept on hold if the account holder in question has other bank accounts with the same bank, provided their current address is up to date in those accounts.
As soon as an accounts is categorised dormant, the UAE Central Bank is updated about the same to initiate the process of transfer of contents.
The bank creates a signature card for the newly categorised dormant account. This is kept separate from all other signature cards to prevent unauthorised access to the contents of the dormant bank account.
The bank also makes sure that all the account related documents are safe and private. This prohibits misuse of the account by minimising opportunities of fraud.
You can simply follow the steps listed in retrieval process to get access to your bank account again. You just have to provide all the relevant documents to the bank and once they’re verified, the bank transfers total ledger value to the re-activated account.
The banks in the UAE do not charge any fees for reactivation. Once your bank account is reactivated, the bank checks to see if the records are maintained up-to-date.
If the account holder does not contact the bank for seven years or more, the bank then transfers the account value to the UAE Central Bank under the section ‘Unclaimed Balances Account – Dormant Accounts’. The UAE Central Bank holds rights to the bank account and its contents until the account holder or the beneficiary files a claim.
Let’s find out how the components of a dormant bank account work.
The interest that the bank accrues on the maintained balance in an inactive account will continue to work in the same way as it does for the active bank accounts.
The bank account holders have the authority to claim and recover their funds held in the dormant account. The bank needs to settle the said claims within one month and provide a valid reason in case of a delay in settlement.
The banks in the UAE keep the safe deposit box charges outstanding for more than two years even if the bank account in question has had no activity for a long time. Here’s how the contents in the safe deposit account are dealt with.
An inactive bank account is converted into a dormant account if the account holder is non-responsive for two months after the date of elapse. The best way to navigate through this issue is preventing your bank account from being categorised as dormant. All you need to do is to make the minimum number of transactions, even if you are not using it on a regular basis.
You can also get in touch with our financial experts to know more about dormant accounts.