We are sure, about 8 out of 10 people will not be able to answer this question. The reason is simple – Banks don’t tell you about it! Go to any Bank’s website and try searching for it, you will not find it!
We are also sure about 7 out of 10 of you have an account that you haven’t used and been better off if the account is closed.
What is the problem?
You may have noticed that Banks are so forthcoming, heck they even have agents (DSAs) for onboarding a new customer. The moment a customer is onboarded the service levels of a Bank consistently keep falling (unless they’re trying to cross-sell one of their products) to the level that there’s virtually zero support when you try to close your Bank account
What it leads to?
More than 80% of the customers are either scared or not comfortable with most of the Banking activities (even a simple cheque deposit).
Banks have tried to address this issue by introducing net banking/ apps but, again, through these apps/websites, Banks are consistently only trying to cross-sell its products.
Not surprisingly, none of the net banking portals have an option to close a bank account – most bank websites yield ‘no result’ if a customer searches for ‘account closure’.
What do the stats say?
As per the latest report of RBI, our Banking system has ~ 5 cr. Inoperative accounts (not operated in the last 10 years). Yes, you read it right! There are around 5 crore inoperative accounts in India and the total money in those accounts is more than 25,000 cr. – that’s YOUR money lying in vaults of Banks.
What does it mean?
If you had an account/deposits in 2010 there’s a ~10% chance that your account would be unclaimed and there’s a 50% chance that amount in this unclaimed account would be more than 5k.
Though RBI has specifically asked Banks to chase such account holders but sadly our Banks are not aligned with the philosophy. There have been multiple instances of customers being misguided/turned down for bank account closure because closure may affect their Branch score negatively.
Why aren’t the banks doing anything about it?
It’s simple! It might be a loss for them. They want to sell more services to you. Closing an account could mean a potential loss for them.
In this world of social distancing, Banks have adopted newer modes of opening accounts wherein a customer is not required to physically visit ‘any’ branch (digital KYC through emudhra). Whereas a customer is required to visit the ‘Home’ branch for simple account activation for an inoperative account/ phone number update for most of the Banks.
Unfortunately, most of these newer age companies are also aiding Banks to sell more of their products and no one is addressing the ‘real’ problem at hand – servicing the existing customers !
While the problem persists because employees of the Banks are judged on the ‘new’ business they get, this could be resolved by adopting simple solutions (emudhra for account closure, enabling ‘close account’ feature in net banking).
This would give customers a flawless experience throughout their lifecycle with the Bank.
What is the solution?
Unfortunately, there is no simple answer to this problem as of today. We are building a service to enable this with a single click for people. If the account opening can be done from home, the account closing should be no different.
We are in dialogue with RBI and several Banks to understand their motivations and trying to solve this problem.
Till that time, you have to visit your bank account and after going through rounds of paperwork, if you are lucky, get your bank account closed. Or for like most of the people, to avoid the hassle, you can just forget about it and the money in that account.
In case you would like our assistance or guidance in closing your bank account and recovering the money in it, contact us today.