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The Reserve Bank of India (RBI) is likely to ask banks to follow a standardised approach to help nominees/heirs of depositors quickly get information on unclaimed deposits from their websites and activate inoperative accounts.
Simultaneously, the central bank is examining the possibility of having a common portal so that information regarding unclaimed deposits/inoperative accounts is available at one place as in some instances the nominees/heirs of depositors are unaware of the deposits.
The number of accounts under the unclaimed deposits category rose about 34 per cent year-on-year to 6.41 crore as of December-end 2019 (4.79 crore as of December-end 2018), with the outstanding amount increasing by about 28 per cent YoY to ₹18,379.52 crore ( ₹14,307.19 crore), per Reserve Bank of India (RBI) data.
The central bank has assessed that the information on some banks’ website on unclaimed deposits/inoperative accounts is not well structured.
The search functionality provided by banks on their websites also varies in terms of mandatory information to be keyed-in by the customer/nominee/ legal heir/authorised signatory to access details of such accounts.
Current regulation
Currently, banks having websites are required to display the list of unclaimed deposits / inoperative accounts, which are inactive/inoperative for ten years or more, on their respective websites.
Those Banks which do not have their websites have to make available the list in their respective branches.
So, if a nominee or legal heir of a deceased customer is not aware of such deposits, he/ she will not be able to find the same until banks upload the data on their website at the end of 10 years.
The central bank wants banks to have a customer-friendly approach concerning unclaimed deposits/inoperative accounts. At the same time, they need to take adequate safeguards.
DEA Fund
Banks are required to transfer to The Depositor Education and Awareness Fund (the Fund), which RBI established in 2014, the amounts becoming due in each calendar month (proceeds of the inoperative accounts and balances remaining unclaimed for ten years or more) and the interest accrued thereon on the last working day of the subsequent month.
In this regard, Bankers say RBI needs to speed up claims processing (return funds) when Banks activate inoperative accounts or settle the claims on unclaimed deposits with the nominees/ heirs of deceased depositors.