RBI Video KYC and Dormant Account Rules 2026: What Every Bank Customer in India Must Know

The Reserve Bank of India has introduced two regulatory changes in 2026 that directly affect individual bank customers across the country. First, Video-based Customer Identification Process (V-CIP) has been pushed as a standard onboarding option, enabling customers to complete their Know Your Customer (KYC) requirements through a live video call without visiting a bank branch. Second, the RBI has tightened the rules on dormant and inactive accounts, with banks now empowered to close zero-balance accounts that have been inactive for a specified period. Together, these changes aim to modernise the banking relationship, reduce physical branch dependency, and ensure that the banking system does not carry the administrative burden of millions of idle accounts. For every individual with a bank account in India, understanding these rules is important to avoid unexpected account closures and to take advantage of the new digital onboarding options.

Video KYC: How V-CIP Works and Who Can Use It

Video-based Customer Identification Process, commonly known as Video KYC or V-CIP, allows customers to complete their identity verification through a live video interaction with a bank official. During the video call, the customer is required to display their original identity documents (typically Aadhaar card or PAN card) to the camera. The bank official verifies the customer's identity by matching the live video feed with the photograph on the identity document, and may ask the customer to perform certain actions such as showing the document from different angles or reading aloud specific details. The entire video session is recorded and stored by the bank as part of the KYC records. The RBI first permitted V-CIP in January 2020 as an alternative to in-person verification, but adoption was initially slow. The 2026 push makes V-CIP a standard onboarding option that all scheduled commercial banks must offer, rather than an optional add-on. This means that any customer opening a new account, updating their KYC details, or completing periodic KYC re-verification can now do so through V-CIP without visiting a branch.

Benefits for Customers: Accessibility, Speed, and Convenience

The primary benefit of V-CIP is that it removes the need for a physical branch visit for KYC compliance. This is particularly significant for customers in rural and semi-urban areas where the nearest bank branch may be several kilometres away. It also benefits senior citizens, persons with disabilities, and others for whom travel to a bank branch may be difficult. For working professionals in urban areas, V-CIP eliminates the need to take time off work to visit a branch during banking hours. The process is typically completed within 15 to 20 minutes, compared to the potentially multi-hour experience of visiting a branch, waiting in queue, and completing paper forms. Banks that have implemented V-CIP report higher completion rates for KYC re-verification, because the reduced friction of the process encourages customers to complete their re-verification on time rather than delaying it. For banks, the reduction in physical footfall at branches allows staff to focus on more complex customer needs rather than routine identity verification.

Dormant Account Rules: When Your Bank Account Can Be Closed

The second major change concerns the treatment of dormant, inactive, and zero-balance bank accounts. Under RBI guidelines, a savings account is classified as inactive if no customer-initiated transaction (deposit, withdrawal, or transfer) has been conducted for a period of twelve months. After twenty-four months of inactivity, the account is classified as dormant. The 2026 rules give banks enhanced authority to close zero-balance accounts that have remained dormant beyond the prescribed period. The rationale is straightforward: the Indian banking system carries millions of accounts that were opened for specific purposes (such as receiving government subsidies or salary payments) but have since become inactive. These accounts impose administrative costs on banks, including KYC maintenance, statement generation, and regulatory reporting, while generating no economic activity. The new rules allow banks to initiate a closure process for these accounts, subject to specified notice requirements to the account holder.

Customer Protections: Notice Period and Right to Reactivate

The dormant account closure process includes several protections for customers. Banks must send written notice to the account holder's registered address and, where available, to their registered email and mobile number before initiating closure. The notice must specify the reason for the proposed closure (inactivity and zero balance) and provide the customer with a reasonable period to either conduct a transaction to reactivate the account or to contact the bank to express their intention to keep the account open. A single customer-initiated transaction during the notice period is sufficient to prevent closure and reset the inactivity clock. For accounts that carry a balance (even a small one), the closure process is more stringent, and the bank must ensure that the balance is either transferred to the customer's nominated account or converted into a demand draft payable to the customer before the account can be closed. The unclaimed balance provisions under the RBI's guidelines on transfer to the Depositor Education and Awareness Fund (DEAF) continue to apply for accounts where the balance remains unclaimed for ten years or more.

What Customers Should Do Now

The practical steps for bank customers are clear. First, review all bank accounts you hold and identify any that have been inactive. If you have accounts that you no longer use but that may contain a balance, conduct at least one transaction (even a small deposit or transfer) to reset the inactivity clock and prevent the account from being classified as dormant. Second, ensure that your registered mobile number and email address are updated with all your banks, so that you receive any closure notices in a timely manner. Third, if you need to update your KYC details or open a new account, ask your bank about the V-CIP option rather than visiting a branch. Fourth, if you hold multiple accounts across different banks, consider consolidating your banking relationships to avoid the risk of accounts becoming dormant due to neglect. The combination of Video KYC and stricter dormant account rules signals the RBI's broader intent to create a cleaner, more efficient banking system where customers are actively engaged with their accounts and where outdated paper-based processes are replaced by digital alternatives.