How To Reactivate A Dormant Trading Account?

A huge number of investors and traders open demat and trading account but not all of them operate actively on their account. They even tend to forget to close the account.

Many investors have received emails from their brokerage firms indicating that their trading accounts have become "dormant" as a result of them not making any transactions.

Amid some recent scandals, SEBI and stock exchanges have enacted strict guidelines for detecting inactive accounts with a legal definition.

Why are trading accounts deemed to be dormant?

Trading accounts are deemed to be dormant if no trading activity has occurred in the past or present.  The trading account's inactive period is determined by the broker. The time frame has been reduced to one year under the new rules and regulations.

If no trading activity is detected for a year, the depository participant (DP) has the authority to disable an investor's trading account without their permission.

How can investors activate their dormant account?

If an investor wants to resume trading in the stock market after a break, they must first reactivate their Demat account before moving on to their trading account.

They must clear all dues, including transaction costs, before closing their trading account since it is considered dormant.

Investors must activate their trading account before closing it in order to do both of the aforementioned tasks at the same time.

The process of reactivating a trading account is simple. Demat accounts, on the other hand, incur charges over time that an investor must pay before terminating their account.

Here's a step-by-step process on how to revive your trading account.

·        Restarting the KYC procedure is the first step in reactivating a trading account. In addition to the KYC procedure, the investor must additionally complete In-Person Verification.

·        The IPV procedure has been performed through webcams and established protocols that an investor must follow, due to COVID-19.

·        The process and rules for reactivating a trading account vary based on the Depository Participant, but the method and criteria remain the same.

·        To close their DP and reactivate their trading account, the customer must send a letter to the company's headquarters or use any other digital options offered by the broker.

·        Investors can restart their trade by sending copies of their PAN and AADHAR cards to the company's headquarters and following the instructions provided by the office.

An investor can easily revive their trading account in this manner.

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