Banks Transferred Unclaimed Deposits Worth Rs1.44 Lakh Crore to DEA Fund in 5 Years; Received Rs5,729 Crore for Refunding to Claimant-depositors: Govt

Moneylife Digital Team 24 July 2023

Economy & Nation

Private and public sector banks (PSBs) have transferred unclaimed deposits worth a whopping Rs1.44 lakh crore to the depositor education and awareness (DEA) fund of the Reserve Bank of India (RBI), the Lok Sabha was informed.

While private sector banks transferred Rs21,315 crore from 31 March 2019 till 31 March 2023, PSBs have transferred Rs122,304 crore to the DEA fund, information shared by Dr Bhagwat Karad, minister of state for finance, shows.

In a written reply, Dr Karad says the depositor education and awareness fund scheme notified by RBI covers norms related to unclaimed deposits and outlines details of utilisation of funds, including promotion of depositors' interests and other purposes as may be specified by the central bank.

"As a result of various steps undertaken to return the unclaimed deposits to their rightful owners or claimants, total Rs5,729 crore has been transferred from DEA Fund to banks towards refund of settling unclaimed deposits, in last five years," the minister added.

From 1 June 2023, RBI has launched a campaign '100 days, 100 pays' for banks to trace and settle the top-100 unclaimed deposits of every bank in every district in the country within 100 days. The campaign will end on 8 September 2023.

Balances in savings or current accounts, which are not operated for 10 years or term deposits not claimed within 10 years from the date of maturity, are classified as 'unclaimed deposits'.

Recently, the central bank also announced the setting up of a centralised web portal for the public to search for unclaimed deposits across multiple banks. (Read: RBI To Develop a Centralised Portal To Search Unclaimed Deposits)

Moneylife has repeatedly written about the difficulty in having bank accounts unfrozen and made operative again. The constant accretion to DEA fund, despite stringent know-your-customer (KYC) requirements, is testimony to the callousness of a system that makes it difficult for funds to be transferred to rightful claimants. In the case of death, each bank makes up its own rules to transfer funds (Read: 'Zindagi ke baad bhi': COVID and the Worries about Transmission and Succession); some even arm-twist heirs to park it in fixed deposits with the same banks. Apart from the red tape involved in obtaining succession certificates, some banks, in addition to succession certificates, demand two sureties from unrelated persons—which is a completely unreasonable demand.

Sucheta Dalal, managing editor of Moneylife and founder-trustee of Moneylife Foundation, had filed a public interest litigation (PIL) in the Supreme Court on making public, on a centralised platform, details of unclaimed money of investors and depositors taken by various regulators and which remains inaccessible to rightful legal heirs.

In response to the petition, RBI submitted that, during FY21-22, the depositors' DEA fund refunded Rs505.51 crore of 187,975 claimants. According to RBI, settling disputed claims by banks may involve adjudication of facts and appreciation of evidence which are normally subject matters of the court and could lead to avoidable litigation involving the banks, which is not in the interest of the banks and their depositors.

In April this year, terming the issue of unclaimed deposits as 'very large', the apex court allowed senior counsel Prashant Bhushan to file a combined rejoinder in the PIL. During the hearing, justice PS Narasimha mentioned that "This issue is very large. It is being considered in detail."

The PIL urges developing a centralised online database under the control of RBI that will provide information about the deceased account-holder, including such details as the name, address and last date of transaction by the deceased account-holder. Further, it should be mandatory for banks to inform RBI about the inoperative or dormant bank accounts, and this exercise should be repeated after an interval of nine to 12 months. (Read: SC Issues Notice on Plea By Sucheta Dalal That Information on Unclaimed Amounts Lying in Dormant Accounts Be Made Publicly Available on a Centralised Platform)

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Comments

User

r_ashok41

2 years ago

What is the procedure for claiming and how to find out whether our name is included in it
Reply

Lopa

Replied to r_ashok41 comment 2 years ago

You go with your passbook to the concerned bank where your money is stuck. They will ask you to write a letter explaining the details of your fund lying with them.

r_ashok41

2 years ago

What is the procedure for claiming and how to find out whether our name is included in it

Lopa

2 years ago

We have private charitable trust and all the trustees have died. My father was one of the trustees. Trust was managed by us. Our fund is locked in Bank of India . How to reclaim the amount which they have frozen from 1992. Bank is asking KYC and death certificates of Trustees. We have death certificate of only one trustee. How to go ahead? Pl advice.