As per the regulatory guidelines of the Reserve Bank of India (RBI), an account is deemed an Unclaimed Bank Deposit if it remains inactive for a period of 10 years or more. Inactivity, in this context, is defined as the absence of any transactions, except for the crediting of interest or debiting of maintenance charges, for a consecutive two-year period. Unclaimed bank deposits encompass funds held in various types of accounts such as current accounts, savings accounts, fixed deposits, recurring deposits, and others within the banking system.
Unclaimed deposits and their locale
Once funds are categorized as Unclaimed Bank Deposits, they are shifted to the Depositor Education and Awareness Fund (DEAF), a fund managed by the Reserve Bank of India (RBI). This transfer of unclaimed deposits to DEAF occurs on a monthly basis. As of the conclusion of the fiscal year 2022-23, DEAF held approximately Rs 62,225 crore. The funds in DEAF are strategically invested in instruments like government securities under the guidance of an RBI-established committee. These unclaimed funds accrue interest at rates specified by the RBI, and the generated income serves multiple purposes. It is utilized to pay interest on deposits within DEAF and is also directed towards initiatives focused on educating and creating awareness among investors.
How to search for an Unclaimed Deposit
It’s crucial to understand the process of searching for an Unclaimed Deposit. Each bank is mandated to upload a comprehensive list of Unclaimed Deposits on its website, encompassing account holder names, account numbers, and corresponding amounts. Customers can initiate the search by providing their information, including name, account number, branch details, among others. Additionally, the Reserve Bank of India (RBI) has introduced a dedicated platform for this purpose called the “Unclaimed Deposits Gateway to Access Information” (UDGAM). Depositors can access information about unclaimed deposits on this portal by inputting basic details like PAN, account number, address, and more.
How to initiate the process of claiming an Unclaimed Bank Deposit
in adherence to RBI regulations, banks are obligated to display information regarding Unclaimed Bank Deposits on their respective websites. Customers can review the details of their unclaimed deposit on the bank’s website and proceed to the bank for the claiming process. To initiate this, customers are required to submit a duly filled claim form, the Receipt of Deposits, and furnish KYC documents like PAN, Address proof, etc., to the bank.
For customers claiming the deposit as legal heirs, the presentation of the account holder’s death certificate and documents substantiating legal heirship is essential. Upon thorough verification of the legitimacy of the claim, the bank will release the payment to the claimant. Following the payment to the customer, the bank files a claim with the RBI to secure a refund from DEAF for the settled claim.
Legal issues
In the case of deposits held under the name of a deceased depositor, the rightful legal heirs must initiate the claiming process. To proceed with the claim, they are initially required to verify and establish their identity as well as legal heirship with the bank. The bank will request the Death Certificate of the deceased account holder and may, if necessary, also seek a Legal Heir Certificate or Succession Certificate. Additionally, the bank may require an Indemnity Bond from the legal heirs to safeguard itself against potential future disputes, especially if counterclaims are raised by other family members.
Unclaimed Bank Deposits present a substantial financial obstacle, emphasizing the importance of awareness for depositors and the banking system. This awareness is essential to protect earned funds, uphold financial transparency, and adopt a proactive stance. Such an approach yields benefits for both depositors and financial institutions, contributing to the overall stability of the economy.
In conclusion, the process of retrieving unclaimed funds from Fixed Deposits (FDs) and savings bank accounts is governed by the regulatory guidelines of the Reserve Bank of India (RBI). Unclaimed Bank Deposits, inactive for 10 years or more, are transferred to the Depositor Education and Awareness Fund (DEAF), holding significant amounts for the fiscal year 2022-23. The proactive approach of depositors in searching for and claiming unclaimed deposits is facilitated through the UDGAM portal and adherence to RBI regulations, ensuring transparency and protection of funds. Legal issues surrounding deceased depositors require verification of legal heirship, documentation, and may involve an Indemnity Bond. Unclaimed Bank Deposits pose a financial challenge, underscoring the need for awareness to sustain financial transparency and stability. This collective effort benefits both depositors and financial institutions, contributing to the overall health of the economy.
