Banks Report 26% Increase in Unclaimed Deposits Of Rs 78,213 Crore

The updated guidelines apply to all commercial banks (including Regional Rural Banks) and cooperative banks, and they came into effect on April 1, 2024

As a step to aid account holders and streamline existing instructions regarding inactive accounts, the Reserve Bank issued comprehensive guidelines earlier this year ( Image Source :Getty )

Unclaimed deposits held by banks surged by 26 per cent year-on-year to reach Rs 78,213 crore by the end of March 2024, according to the Reserve Bank of India (RBI) Annual Report released on Thursday. In comparison, the amount held in the Depositor Education and Awareness Fund accounted for Rs 62,225 crore as of March 2023. 

Banks, including cooperative banks, transfer unclaimed deposits from account holders dormant for 10 years or more to the RBI's Depositor Education and Awareness (DEA) Fund.

As a step to aid account holders and streamline existing instructions regarding inactive accounts, the Reserve Bank issued comprehensive guidelines earlier this year. These guidelines outline measures to be implemented by banks, encompassing the classification of accounts and deposits as either inactive or unclaimed, as appropriate.

The RBI provided guidance to banks on conducting regular reviews of such accounts, implementing measures to prevent fraud in these accounts, establishing a grievance redress mechanism for prompt complaint resolution, and taking proactive steps to locate customers of inactive accounts or unclaimed deposits, including their nominees or legal heirs, to facilitate the reactivation of accounts, settlement of claims, or closure. Additionally, the RBI outlined the procedural steps banks should follow in this regard.

These directives were anticipated to augment the continuous endeavours and measures undertaken by both banks and the Reserve Bank to cut down the volume of unclaimed deposits within the banking system and facilitate the return of such deposits to their rightful owners.

The updated guidelines apply to all commercial banks (including Regional Rural Banks) and cooperative banks and it came into effect from April 1, 2024. To simplify the process for depositors to search for unclaimed deposits across various banks in a centralised manner, the Reserve Bank has developed a web portal called UDGAM—Unclaimed Deposits Gateway to Access Information.