Question: A bank sent a written communication to the holder of an inactive savings account, but the letter was returned undelivered. Before treating the account as one where the customer's whereabouts could not be confirmed, the bank was expected to take the next prescribed step. According to the RBI Master Circular on Customer Service in Banks, 2014 what should the bank do after the communication is returned undelivered?
Answer: After the communication is returned undelivered, the bank should make reasonable efforts to trace the customer's whereabouts or, if the customer is deceased those of legal heirs. Depending on the information available, the bank may contact the introducer, employer or use other contact details such as telephone or email before taking any further action.

Supporting evidence:
title: rbi.org.in/72MC010714CS.pdf
quote: If the letters are returned undelivered, they may immediately be put on enquiry to find out the whereabouts of customers or their legal heirs in case they are deceased In case the whereabouts of the customers are not traceable, banks should consider contacting the persons who had introduced the account holder. They could also consider contacting the employer / or any other person whose details are available with them. They could also consider contacting the account holder telephonically in case his Telephone number / Cell number has been furnished to the bank. In case of Non Resident accounts, the bank may also contact the account holders through e-mail and obtain their confirmation of the details of the account
context: anks may approach the customers and inform them in writing that there has been no operation in their accounts and ascertain the reasons for the same. In case the non- operation in the account is due to shifting of the customers from the locality, they may be asked to provide the details of the new bank accounts to which the balance in the existing account could be transferred.

24. Unclaimed Deposits / Inoperative Accounts in banks

- (ii) If the letters are returned undelivered, they may immediately be put on enquiry to find out the whereabouts of customers or their legal heirs in case they are deceased.
- (iii) In case the whereabouts of the customers are not traceable, banks should consider contacting the persons who had introduced the account holder. They could also consider contacting the employer / or any other person whose details are available with them. They could also consider contacting the account holder telephonically in case his Telephone number / Cell number has been furnished to the bank. In case of Non Resident accounts, the bank may also contact the account holders through e-mail and obtain their confirmation of the details of the account.
- (iv) A savings as well as current account should be treated as inoperative / dormant if there are no transactions in the account for over a period of two years.
- (v) In case any reply is given by the account holder giving the reasons for not operating the account, banks should continue classifying the same as an operative account for one more year within which period the account holder may be requested to operate the account. However, in case the account holder still does not operate the same during the extended period, banks should classify the same as inoperative account after the expiry of the extended period.
- (vi) For the purpose of classifying an account as 'inoperative' both the type of transactions i.e., debit as well as credit transactions induced at the instance of customers as well as third party should be considered. However, the service charges levied by the bank or interest credited by the bank should not be considered.
- (vii) There may be instances where the customer has given a mandate for crediting the interest on Fixed Deposit account to the Savings Bank account and there are no other operations in the Savings Bank account. Since the interest on Fixed Deposit account is credited to the Savings Bank accounts as per the mandate of the customer, the same