Money with banks in India for which there are no takers has gone up 2.5x times in the post-Covid period. Driven largely by savings accounts turning inoperative or dormant and fixed deposits not redeemed, unclaimed deposits with scheduled banks crossed ₹42,000 crore as of March 2023.

Public sector banks SBI and PNB hold bulk of unclaimed deposits

With the pandemic disrupting lives, deposits with banks across current accounts, savings accounts, FDs and other instruments that are unclaimed by customers stood at ₹39,900 crore as of December 2022, more than double from ₹18,379 crore in December 2019, as per RBI’s granular data. This includes balances with public sector, private, foreign, regional rural banks, and others. Despite tech initiatives and public awareness campaigns, the unclaimed monies held by public and private sector banks alone reached ₹42,270 crore as of March 2023, as per data revealed in Parliament.

Public sector banks hold the bulk of deposits at ₹33,303 crore (83% of the total) as of December 2022. The largest public sector lender, State Bank of India, holds 2.16 crore accounts worth ₹8,069 crore of deposits. With ₹5,298 crore, Punjab National Bank held the second-highest value of deposits, which grew almost 5x from 2019. Among private banks, ICICI Bank holds 31.8 lakh accounts worth ₹1,074 crore of deposits as of December 2022, and HDFC Bank holds ₹447 crore deposits, which has doubled from 2019. Foreign bank DBS Bank, which merged Lakshmi Vilas Bank with itself, grew its unclaimed deposits from 0.5 crore in 2019 to ₹94 crore in 2022.

Balances in savings / current accounts that are not operated for 10 years or term deposits not claimed within 10 years from date of maturity are classified as unclaimed. These are then transferred by banks to the Depositor Education and Awareness (DEA) Fund maintained by RBI. The depositors are still entitled to claim the money at a later date from their banks, along with interest, as applicable. Further, banks are not allowed to levy penal charges for non-maintenance of minimum balances in accounts classified as inoperative.

Factors driving the rise

Bankers attribute the increase to customers not closing accounts they don’t intend to operate or losing track of accounts when they migrate cities. Post-Covid, balances have risen due to accounts and deposits of deceased customers, with no nomination. Sometimes,f nominees have not come forward to make a claim, a banker said. “One has to go to their branches physically to claim the deposits. And in case you are a legal heir, there is a lot of documentation to satisfy before you can claim the money,” the person said, explaining the complexities.

To tackle this, RBI also launched an online portal UDGAM (Unclaimed Deposits-Gateway to Access Information) last year to help users search for unclaimed deposits across multiple banks in a centralised manner. As of March 2024, 30 banks are part of UDGAM, hosting information on unclaimed monies. RBI has also instructed banks to undertake regular reviews of large unclaimed amounts and reach out to such customers. Analysts note that more tech-driven initiatives such as the Account Aggregator system, which connects all bank accounts of a person to a central framework, can help bring down the unclaimed funds lying with banks.

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