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

Moneylife Digital Team 12 August 2022

The Supreme Court on Friday issued notice to ministries of finance, corporate affairs, Reserve Bank of India (RBI) and Securities & Exchange Board of India (SEBI) in a plea by Sucheta Dalal, managing editor of Moneylife and founder-trustee of Moneylife Foundation. The plea, taken up by senior counsel Prashant Bhushan is about making public on centralised platform details of unclaimed money of investors and depositors taken by various regulators and remains inaccessible to rightful legal heirs.

While issuing notices, the bench of justice S Abdul Nazeer and justice JK Maheswari noted that the issue dealt with an important question.

Mr Bhushan, representing Ms Dalal, says, "Notices have been issued (in this case), which is returnable in eight weeks. The Bench felt it was an important issue."

In her plea, Ms Dalal contended that unclaimed funds of the public that get transferred to government-owned funds like the Depositor's Education and Awareness Fund (DEAF), Investor's Education and Protection Fund (IEPF) and Senior Citizen's Welfare Fund (SCWF) on the ground that the legal heirs or nominees did not claim them, should be made available to the legal heirs or nominees by providing information of holders of inoperative or dormant accounts on a centralised online database.

As per the petition, DEAF had Rs39,264.25 crore at the end of March 2021, up from Rs33,114 crore on 31 March 2020 and a sharp rise from Rs18,381 crore at the end of March 2019. Further, the amount lying with the IEPF, which started at Rs400 crore in 1999, was 10 times higher at Rs4,100 crore at the end of March 2020. During the past five years, life and non-life insurance companies have transferred Rs1,723.20 crore to the SCWF.

The petition urges developing of 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.

"...the need for a centralised database providing information of deceased accountholders also becomes extremely essential when seen in the context of the already existing time consuming and cumbersome process that legal heirs have to go through while making claims after the death of an individual," the plea submitted.

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Comments

User

Shrikrishna Kachave

4 months ago

Moneylife has raised a very important issue which otherwise had remained neglected. This shall pave a long way for the public.

vikram.chin

11 months ago

What about getting the existing IEPF (Investor Education Protection Fund) to do it's job ? Companies have to transfer unclaimed shares and dividends to the IEPF after 7 years . The govt. is in no hurry to expedite transmission of assets as they can continue to enjoy the assets and interest on them while they are in limbo.

vikram.chin

11 months ago

What about getting the existing IEPF (Investor Education Protection Fund) to do it's job ? Companies have to transfer unclaimed shares and dividends to the IEPF after 7 years .

radhikaasb

1 year ago

As an ex banker, pl let me add major problems faced by bankers, due to which, they are mandatory required to transfer the funds to DEAF

1. Customers do not operate their accounts for long periods, due to many reasons..they shift, have more than one accounts and normally Operate only one account, are ill or die. One reason is they are benami accounts and parked funds.
2. Address, Contact number, KYC details are not updated.
3. Nominee details are not filled up.
4. Depositors do not inform their Families of account details

All these result banks being unable to inform the beneficiary that account will b transferred to Unclaimed Deposits.

Having said that, while making a public database is a very good idea.. confidentiality issuez and access modality will pose a practical challenge.

Due to this, bankers are unable to

arunanaokar

1 year ago

Please make the same appeal to govt of Maharashtra for simplification of the leagal process to obtain secsetion certificate from court. They are the first to give girls the share in property

M J SHAH

1 year ago

This is super . I would like to add that nominee of the deceased also be alerted as accounts may become dormant also if the primary holder is a deceased investor.

sushant.kumar199915

1 year ago

Great initiative. Looking forward for the outcome.

thakur.krishnamurthy

1 year ago

Kudos Sucheta Ji, Very useful initiative to make such information public, the amount is large and that it does not get misutilised.

jkummar

1 year ago

Useful initiative

riteshcalcutta

1 year ago

Congratulations ,

1957arunsharma

1 year ago

I appreciate the efforts done by Ms Suchita Dalal & Supreme Court Notices. I request Supreme Court & Ms Suchita Dalal to make procedure easy to claim that amount. At present their is a unpractical procedure which takes long time at the mercy of these departments.

angelo.extross

1 year ago

Congratulations Sucheta Dalal,
This is the first step in a long battle, but all battles start with the first step.
You are doing yeomen service to the unfortunate. Wish you all the best.

ASHWIN MEHTA

1 year ago

Many a times, the wording " UNCLAIMED AMOUNT" is not true. Its from the regulator perspective. In fact it should be termed as " UNCLAIMABLE AMOUNT" as the diffrent forms which needs to be filled, to claim your legitable amount, gets held up for such needs. Many unwanted details are asked for. I was having a tough time to get such forms removed from their website of erstwhile Dena Bank's nodal officers. The form was in relation to the claim by the legal heirs, where in the late account holder has not registered any Nominee/s.

Kamal Garg

1 year ago

What a co-incidence and mockery that the acronym of "Depositor's Education and Awareness Fund" is actually "DEAF" . No doubt all the related complaints go to the DEAF and are, therefore, not recorded/heeded/replied/goes into a forever spin.

D C Mahulkar

1 year ago

Wonderful work for the helpless investors by Smt. Sucheta Dalal. There are many incidences when investors forget to claim during mandatory period their rightful dues due to change in address, misplacement of documents, forgetfulness about the investment etc. Is it possible by your efforts, will the investor be able to claim amount lying in IEPF? I have tried my level best to get the amount but there was no response from IEPF.

sucheta

Replied to D C Mahulkar comment 1 year ago

We hope you have not given up on your rightful dues. 1) this fight is just beginning. So we will need examples like yours to prove that the system is still outrageously bad -- IEPF claims otherwise and tweets it too. Secondly there are people who will help ... some truly genuine ones, but they need to be paid a small fee. On the other hand there are cheats and touts who demand anywhere between 20-50% to get money back.