FM Sitharaman asks regulators for swift refunds of unclaimed funds to citizens at FSDC meet

Finance Minister and other officials at FSDC meet on June 10

In a push to enhance citizen-centric governance in the financial sector, Union Finance Minister Nirmala Sitharaman on June 10 directed regulators and government departments to fast-track the return of unclaimed funds to their rightful owners by organising coordinated, multi-agency special camps at the district level.

Chairing the 29th meeting of the Financial Stability and Development Council (FSDC) in Mumbai, the Finance Minister emphasised that "interest of common citizens to be kept in mind and refund the claims of rightful claimants". The meeting brought together financial regulators and key policy officials to review ongoing challenges and discuss policy measures for strengthening financial sector stability.

The Council’s focus on returning unclaimed assets focusses on dormant financial instruments such as inoperative bank accounts, unclaimed insurance policies, and dormant securities holdings. Unclaimed amounts remain locked due to lack of awareness or procedural delays.

According to an official statement issued by the Finance Ministry, the FSDC deliberated on reducing the quantum of unclaimed assets, accelerating refund mechanisms, simplifying and digitising Know Your Customer (KYC) procedures, increasing the investment ratio, and further reforming factoring services and the account aggregator ecosystem.

Sitharaman asked to take "proactive steps for seamless KYC processes across the financial sector to enhance user experience", highlighting the need to remove friction in compliance procedures that affect both individuals and businesses.

The Council also stressed the importance of enhancing inter-regulatory coordination to enable the financial sector’s deeper and more inclusive development.

The FSDC is an apex-level body chaired by the Finance Minister and comprises heads of all major financial regulators — including RBI, SEBI, IRDAI, PFRDA — along with key secretaries in the Finance Ministry. It plays a pivotal role in ensuring coordination among financial sector regulators and formulating strategies to maintain financial stability while promoting inclusive growth.