Unclaimed deposits with banks rise to Rs. 42,270cr in FY23
What's the story
Unclaimed bank deposits in India have seen a 28% yearly increase, reaching Rs. 42,270 crore as of March 2023, according to data shared with Parliament on Tuesday. This is a notable jump from the Rs. 32,934 crore in unclaimed deposits held by public and private sector banks in FY22. The unclaimed deposits include Rs. 36,185 crore with public sector banks and Rs. 6,087 crore with private sector banks.
Details
Banks send unclaimed deposits to RBI's DEA fund
Banks must transfer unclaimed deposits that have been in accounts for ten or more years to the Reserve Bank of India's (RBI) Depositor Education and Awareness (DEA) Fund. In a written response to Rajya Sabha, Minister of State for Finance Bhagwat K Karad said the RBI has taken various steps to decrease unclaimed deposits and return them to rightful owners.
What Next?
RBI directs banks to display list of unclaimed deposits
Following the RBI's guidance, banks are instructed to display lists of unclaimed deposits in accounts inactive or inoperative for ten years or more on their websites. They are also directed to locate customers or legal heirs of deceased account holders to return unclaimed deposits to rightful claimants. Moreover, the RBI has asked banks to create board-approved policies on classifying unclaimed deposits and establish grievance redressal mechanisms for quick complaint resolution.
Insights
Centralized web portal UDGAM set up by RBI
The RBI has developed a centralized web portal called Unclaimed Deposits Gateway to Access Information (UDGAM) to search for unclaimed deposits across multiple banks. Additionally, the RBI has launched a campaign named '100 Days 100 Pays.' Its aim is for banks to track and settle the top 100 unclaimed deposits of each bank in every district within a 100-day period, beginning on June 1, 2023, and concluding on September 8, 2023.
Facts
Major banks refund Rs. 1,432.68 crore
By the end of the '100 Days 100 Pays' campaign, 31 major banks, accounting for over 90% of unclaimed deposit balances with the DEA Fund, had refunded Rs. 1,432.68 crore. This effort highlights the RBI's dedication to reducing unclaimed deposits and ensuring rightful claimants receive their due amounts. The ongoing efforts by the central bank and financial institutions aim to increase transparency and enhance customer service in the banking sector.