The Hindu Business Line : Unclaimed dividend: Panel pitches for bonafide shareholders

The Standing Committee on Finance has recommended that the Government provide legitimate space to bonafide claimants of dividend amounts from nationalised banks even after a seven-year limitation period.

In its report on the Banking Companies (Acquisition and Transfer of Undertakings) and Financial Institutions Laws (amendment) Bill, 2005, the standing committee has recommended changes in the proposed Section 10 C of the Bill, to ensure the provisions are in conformity with the Companies Act. The standing committee's report was presented to the Lok Sabha on Thursday.

Section 10 C relates to the transfer of unclaimed dividends on the books of nationalised banks to the investor education and protection fund. But the proposed provision was not in line with relevant provisions of the Companies Act.

After questioning by the standing committee, the Government agreed to incorporate necessary changes to make the provisions consistent with those of the Companies Act.

As per the provisions applicable, the unclaimed dividend amounts cease to be payable beyond a seven-year period, which, according to the standing committee, may deprive bonafide claimants of their rightful dues.

The standing committee, chaired by Maj Gen (retd) B.C. Khanduri, suggested providing a mechanism through which a shareholder could, owing to bonafide reasons and subject to verification, claim his dividend dues even after the seven-year limitation.

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