Banks have the authority to term any bank account as 'inactive' or 'dormant' or 'inoperative' if there has been no transaction in the account for atleast one year. Once an account is termed inactive by the bank, no ATM, mobile or internet banking facility can be availed on it.

This is because banking systems cannot identify inactive accounts. The criteria for classifying an account as inactive is however different for different banks. While it is 12 months for HDFC Bank, it is 15 months for ICICI Bank and 2 years for foreign lenders like Citibank, HSBC and Standard Chartered Bank.

IBA policy says that banks have the authority to freeze unused accounts of customers. However, customers should be informed of the relevant charges associated with the process. Although no penalty is charged by banking majors like State Bank of India, ICICI and HDFC Bank, banks like Barclays impose Rs 250 as penalty in this case excluding service charges.

In case the account has to be activated, the account holder/holders have to go in person to the bank with the application for the same duly signed by them. Also a photo identity proof like passport, voter's ID card, driving license is required for the same.