What happens to your unclaimed bank deposits?
Jenika Shah 24 April 2018
As per data from the Reserve Bank of India (RBI), an amount of almost Rs11,302 crore belonging to over three crore account holders is lying unclaimed with 64 banks in the country. The RBI had given detailed instruction on dealing with unclaimed deposits or inoperative accounts and yet many depositors fail to understand its consequences or claim their bank deposits after maturity. Two things could happen with an unclaimed or inoperative (dormant) deposit. The unclaimed FD could be converted into an interest bearing demand deposit or else, the proceeds would be transferred to RBI’s Depositor Education and Awareness Fund (DEAF).   
RBI has specified that both savings and current account are treated as inoperative or dormant if there are no transactions, whether debit or credit, and initiated either by the customer or a third party, for over two years. In the case of non-operation in the account, the bank is required to inform the customer. 
In the case of unclaimed bank deposits, two things can happen according to the RBI.
1) If term deposit matures and the proceeds remain unpaid, the amount left unclaimed with the bank gets converted into an interest bearing demand deposit and attracts rate of interest as applicable to savings deposit account.
2) The Banking Regulation Act, 1949 empowered RBI to establish the DEA Fund. The Fund is created by taking over inoperative deposit accounts, which have not been claimed or operated for 10 years. When the FD remains unclaimed for 10 years or more, cumulative balance gets transferred to the DEA Fund on the last working day of subsequent month along with the interest accrued. 
However, unclaimed fund or account balance transferred to DEA Fund does not mean that the customer cannot claim it. The customer has to approach the Bank and submit completely filled prescribed form, along with necessary documents. The form is available at the branch or can be downloaded from bank’s website. If the claimant is the legal heir of the account holder, then she needs to also attach the death certificate of the (primary) account holder along with the form. Once the bank verifies the details, it allows the claimant to convert the inoperative or unclaimed account to a regular one and transactions are activated. For legal heirs, the regular claim settlement procedure is followed by the bank.  
In case of demand from the customer or depositor, whose unclaimed balance or FD is transferred to DEA Fund, banks need to repay the customer or depositor, along with interest if applicable. The Bank then lodges a claim for refund from the Fund for an equivalent amount paid to the customer or depositor. 
Reference: RBI Master Direction DBR. Dir. No.84/13.03.00/2015-16 dated 3 March 2016
3 years ago
Ramesh Poapt
5 years ago
good information, thanks
Dr.Dhananjaya Bhupathi
5 years ago
It must be more than Rs.11302 crores; because it was about Rs.9000 crores in 1995. The Supreme Court ordered to spend such moneys for the welfare of the handicapped. But, who cares? Accuracy of amount & SC order?
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