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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
Investor Interest
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
Shrikrishna Kachave
2 years ago
Moneylife has raised a very important issue which otherwise had remained neglected. This shall pave a long way for the public.
Reply
vikram.chin
2 years 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.
Reply
vikram.chin
2 years 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 .
Reply
radhikaasb
2 years 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
Reply
arunanaokar
2 years 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
Reply
M J SHAH
2 years 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.
Reply
sushant.kumar199915
3 years ago
Great initiative. Looking forward for the outcome.
Reply
thakur.krishnamurthy
3 years ago
Kudos Sucheta Ji, Very useful initiative to make such information public, the amount is large and that it does not get misutilised.
Reply
jkummar
3 years ago
Useful initiative
Reply
riteshcalcutta
3 years ago
Congratulations ,
Reply
1957arunsharma
3 years 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.
Reply
angelo.extross
3 years 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.
Reply
ASHWIN MEHTA
3 years 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.
Reply
Kamal Garg
3 years 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.
Reply
D C Mahulkar
3 years 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.
Reply
sucheta
Replied to D C Mahulkar comment 3 years 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.
Reply
dayaka58
3 years ago
These amounts are transferred to them as trustees on behalf of beneficiaries. And have to hold it in trust till there is a valid claim. Many a times legal heirs may come to know about it after considerable time. The documents might have been mis placed. They may be asked to transfer a certain percentage of income earned on these assets every year to a perpetual reserve to be available till the last claiment claims the assets.
Reply
dayaka58
3 years ago
A good case is Karvy stock broking case. Even though clients have asked to close the account and transfer holdings to their demat account with other DP NSDL has forcibly transferred the demat account to a new DP and forcing us to comply their dictates and account has been deactivated. Even my complaints against Karvy when they refused to act on my account closer request is pending with NSDL .
Reply
dayaka58
3 years ago
Now a days every regulator is interested in blocking acess to the assets without trail on flimsy grounds of updation of details kyc and what not and have made it a fertile ground for cyber crimes. And there are so many silent sufferors who can not afford to fight for their rights. On transfer or change of place you have to run from pillar to post for having a address proof. Because no authority believes in their own systems and force you to bring an outside authentication which is practically impossible in present day circumstances in a new place. No one should be blocked acess to his financial assets by enmass directives in the name of prevention.
Reply
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