Reserve Bank of India (RBI) governor Shaktikanta Das on April 6 announced a centralised web portal for the public to search unclaimed deposits. This is first such initiative in India.
Unclaimed deposits form a significant chunk in India’s banking system. According to government data, the total amount of unclaimed deposits transferred to the RBI by public sector banks (PSBs) fell to Rs 35,012 crore till February 2023, from Rs 48,262 in March 2022. This is a decline of Rs 13,250 crore in a year. In this context, the launch of the portal for the public to get information on unclaimed deposits is important.
Here’s an explainer to understand the announcement in detail.
What is RBI's recent announcement about a centralised web portal?
Reserve Bank of India (RBI) governor Shaktikanta Das announced the development of a centralised web portal for the public to search unclaimed deposits.
Why did RBI decide to come up with this new portal?
According to India's central bank governor, in order to improve and widen the access of depositors/beneficiaries to information on such unclaimed deposits, it has been decided to develop a web portal to enable search across multiple banks for possible unclaimed deposits.
When is the portal expected to start functioning?
The portal to reclaim unclaimed deposits will be ready in three-four months, said M Rajeshwar Rao, Deputy Governor (DG), Reserve Bank of India.
"We expect the portal where the funds of Depositor Education and Awareness Fund (DEAF) are transferred to be ready in three-four months," Rao said in a post-monetary policy committee (MPC) press conference.
How will the new portal help depositors/beneficiaries?
This will help depositors/beneficiaries in getting back unclaimed deposits.
What is the current procedure for tracking unclaimed deposits?
According to the RBI governor, at present, the depositors or beneficiaries of unclaimed bank deposits of 10 years or more have to go through the websites of multiple banks to locate such deposits.
What is an unclaimed deposit?
An unclaimed deposit is one which does not see any activity like an infusion of funds, withdrawal, etc. from the depositor for 10 years or more, and is deemed as an inactive deposit.
After terming a deposit as an unclaimed deposit, banks have to report the number of unclaimed deposits and the amount lying in the same to the RBI.
How much unclaimed deposits are lying in banks?
Out of the Rs 35,012 crore total unclaimed deposits held by banks in India till February 2023, India's largest public sector bank, SBI, has the largest share of Rs 8,086 crore, followed by Punjab National Bank at Rs 5,340 crore, Canara Bank at Rs 4,558 crore and Bank of Baroda at Rs 3,904 crore.
What do RBI rules say about unclaimed deposits?
As per the instructions issued by RBI to banks through a July 2014 circular on Customer Service in Banks, banks are required to make an annual review of accounts in which there have been no operations for more than a year.
The banks may then approach the customers and inform them in writing that there has been no activity in their accounts and ascertain the reasons for the same.
Other than this, banks have also been advised to consider launching special awareness drives for finding the whereabouts of customers or legal heirs in respect of accounts that have become inoperative, i.e., accounts that have not seen any transactions over a period of two years.
After all of this, banks are required to display the list of unclaimed deposits or inoperative accounts which are inactive or inoperative for 10 years or more on their respective websites, with the list containing the names and addresses of the account holders in respect of unclaimed deposits or inoperative accounts.
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