The Fate of Inactive Bank Accounts in the UAE

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.   

When Does a Bank Account Become Dormant? 

Bank accounts become dormant, when:

1. Savings or current accounts remain inactive for at least six years. The nature of transactions does not include actions taken by bank.
2. Renewable and non-renewal deposit accounts remain inactive for 5 years and 12 months respectively. 
3. Investment accounts remain inactive for 12 months from the date of maturity. 

Steps Followed to Categorise a Bank Account Dormant?

Here is a list of steps that UAE banks follow before filing a bank account as dormant:

1. Contacting the Account Holder

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.

2. Transfer of Contents

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. 

3. Signature Cards

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.  

4. Safeguarding the Documents

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. 

How to Reactivate a Dormant Bank Account in the UAE?

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. 

How Do Components a Dormant Bank Account Work?

Let’s find out how the components of a dormant bank account work.  

1. Interest

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.

2. Funds

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.

3. Safe Deposit Boxes

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.

• Transfer to UAE Central Bank: If the bank fails to get in touch with the account holder for three months, the contents of the safe deposit box remain inaccessible without permission.
• Appointment Request: The bank needs to request an appointment from the court to open the safe deposit box in the presence of one of the legal authorities. The bank must submit the detailed list of the contents in the safe deposit box to the UAE Central Bank. In case the court has ordered to sell any of the contents, the sale value must be transferred to the Unclaimed Balances Account in the Central Bank. The bank can deduct the incurred charges before transferring the amount to the Central Bank.
• Create Reports: The bank needs to create a report for all the transfers and other bank account contents while mentioning the same in the dormant account ledger. They need to share a copy of the same with the Banking Supervision and Banking Operations Department of the Central Bank.

The Bottom Line

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.