Indian government and private sector banks are introducing an easy process for the recovery of more than Rs 78,213 crore of unclaimed deposits. The process will include a common application form and standard document requirements so that claimants or nominees will not find it difficult to receive money. An end-to-end online recovery system is to be made available by FY26.
Simplified Process For Claimants
At present, unclaimed deposits are maintained in accounts that have been inactive for more than a decade and are deposited into the Reserve Bank of India's (RBI) Depositor Education and Awareness (DEA) Fund. As of March 2024, the fund stood at Rs 78,213 crore, a rise of 26 per cent compared to the last financial year.
In order to make the process of retrieval at quicker rate, banks will adopt a common template prepared by public sector banks (PSBs) and communicated to private sector banks by the Indian Banks' Association (IBA). The account holder details or their legal heirs will have to be provided, i.e., name, mobile number, and address, which would be verified by the relevant bank branch prior to disposal of the claim.
RBI's Drive for Improved Access
The initiative comes as banks gear up to implement RBI’s updated guidelines on unclaimed deposits and inactive accounts, which will take effect on April 1, 2025. Under the new rules, banks must publish the details of unclaimed deposits on their websites. This will include account holder names and addresses, and a search tool will be made available for the public to check if they have any unclaimed funds.
Currently, customers can check unclaimed deposits using RBI’s UDGAM portal, but they must visit the respective bank branch to complete the claim process. The proposed changes aim to digitise and simplify this procedure, eventually allowing for full online retrieval.
Government And Regulatory Support
The step was a continuation of a larger exercise carried out last year when the finance minister, Nirmala Sitharaman, requested financial regulators to organise a special drive for closing bank deposits with unclaimed deposits, mutual fund units, equity, dividend, and insurance policies. The Banking Laws (Amendment) Bill, 2024, also functioned by enhancing the number of nominees that can be accepted per bank account from one to four, curbing discord among ownership of funds.
A high-level working committee of senior state bank officials was also established to make recommendations on how to speed up the settlement process. A common format, suggested by them, will reduce red tapism and the burden of paperwork, and valid claimants will be able to get their money more easily.
What This Means For Account Holders
For consumers, this is an easier, quicker, and simplified process to recover unclaimed money. Searching online for unclaimed deposits and making claims without coming to a bank branch will avoid delays and make the process seamless when launched full-fledged.
With Rs 78,213 crore remaining unclaimed, such reforms are an important step toward making it easy for the legitimate owners or their heirs to retrieve their money.
