According to the Reserve Bank of India (RBI) regulation, if an account remains inoperative for 10 years or more, then such an account / deposit is classified as an Unclaimed Bank Deposit. An account is treated as inoperative if there is no transaction other than interest being credited or maintenance charges being debited for two years.
Here unclaimed bank deposits refer to funds lying in current accounts, saving accounts, fixed deposits, recurring deposits etc with banks.
Unclaimed deposits and their whereabouts
Once the corpus is classified as an Unclaimed Bank Deposit, it gets transferred to a fund maintained by the RBI, which is known as the Depositor Education and Awareness Fund (DEAF). Unclaimed deposits are transferred to DEAF every month.
There were around Rs 62,225 crore lying in DEAF at the end of FY 2022-23. The money in the fund is invested in instruments such as government securities by a committee set up by the RBI. The Unclaimed money earns interest at the rate specified by RBI. The income earned is used to pay interest into deposits lying in DEAF and is also used for investor education and awareness purposes.
How to search for an Unclaimed Deposit
It is essential to know how customers can search for an unclaimed deposit. Every bank has to upload the list of Unclaimed Deposits with account holder names, account numbers and the amount on its website. Customers can search the details by entering their information, such as name, account number, branch etc. Further, the RBI has now launched a specific portal for search of Unclaimed Deposits, called “Unclaimed Deposits Gateway to Access Information” (UDGAM). Depositors can search the details of unclaimed deposits by entering basic details such as their PAN, account number, address etc.
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How to claim the Unclaimed Bank Deposit
As per RBI regulations, banks are required to show the details of Unclaimed Bank Deposit on their website. Customers can check the details of their unclaimed deposit on the bank’s website and then visit the bank to claim it. To do this, a customer needs to present a duly filled claim form, Receipt of Deposits and submit KYC documents such as PAN, Address proof etc with the bank.
If a customer is claiming the deposit in the capacity of a legal heir, then s/he needs to present the death certificate of the account holder and documents evidencing the legal heirship. After verifying the genuineness of claim, the bank will release the payment to the claimant. After the Bank makes the payment to the customer, it lodges a claim with the RBI to get a refund from DEAF for the settled claim.
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Legal issues
If the Deposits are held in the name of a depositor who is deceased, his/her legal heirs need to make the claim.
To make the claim, they first need to establish their identity and legal heirship with the bank. The bank will ask for the Death Certificate of the deceased holder and if required, will also ask for a Legal Heir Certificate or Succession Certificate. The bank may also ask for an Indemnity Bond from the legal heirs to protect itself from any future dispute in case a counter claim is filed by other family members.
Conclusion
Unclaimed Bank Deposits pose a significant financial challenge. Awareness of unclaimed deposits is crucial for both depositors and the banking system. It ensures that hard-earned funds are safeguarded while maintaining financial transparency. This proactive approach benefits depositors and financial institutions alike, reinforcing overall economic stability.
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