Money Which Lies Forgotten: Unclaimed Deposits In India Rise To Rs 19,567, 33 Per Cent Growth In One Year

As of June 2018, the Reserve Bank of India’s (RBI) Depositor Education and Awareness Funds (DEA) has Rs 19,567 crore unclaimed in government vaults, reports the New Indian Express. The DEA fund is created to take over unused or unclaimed bank accounts and deposits for the past ten years or more.

Unclaimed deposits are defined as those funds which have not been used for the past ten years or more. After the time period of 10 years, banks have to transfer the cash to the RBI along with the interest accrued. These funds are then used to increase financial literacy can be reclaimed by its beneficiaries after following due process.

These unclaimed deposits have been increasing, as the latest amount is 33 per cent more than the previous year when 2017 when unclaimed deposits stood at Rs 14,697 crore.

In 2017, the unclaimed deposits belonged to 3.47 account holders in 64 public, private banks and foreign lenders. This amount does not include unclaimed stocks, insurance proceeds, safe deposit box contents and other valuables which were not reported from the banks, and could shoot up the unclaimed assets.

Experts say that the unclaimed assets accumulate since the next of kin of the deceased are not aware or are not able to establish legit claims over the finances.

According to section 26 of the Banking Regulation Act, 1949, banks need to transfer the total balance along with interest to the DEA fund on the last working day of the following month.

Despite the RBI, enforcing banks to conduct audits of these accounts regularly and efforts to reach the customers, banks continue accumulating the assets. According to data released, SBI (Rs 1,262 crore) tops the list of assets in inactive accounts, followed by Punjab National Bank (Rs 1,250 crore).