How to reclaim forgotten bank deposits

As per the RBI’s latest annual report, the balance lying in Depositors’ Education and Awareness Fund (DEA Fund), was up by 18 per cent to ₹39,264 crore as on March 31, 2021. Banks are required to transfer deposits that have been lying idle with them for 10 years or more (along with interest accrued) to the DEA Fund periodically. .

Deposits here, mean idle (credit) balance in savings and current accounts, term/ fixed deposits, cash credits, loan accounts (after necessary appropriations), margin money accounts and outstanding remittances not credited to beneficiary accounts. For instance, if a bank has made adjustments to a loan account after it has been fully settled, in the form of say refund of excess interest charged, then the loan account will have a credit balance. In cases where the customer’s updated contact details are not available with the bank, these balances may remain unclaimed.

Similarly, term/fixed deposits can become unclaimed after they mature, if a customer does not have a savings account with the same bank to which the proceeds can be transferred upon maturity. In the absence of correct and updated contact details with it, the bank may not be able to intimate the customer.This is still happening today as the present day KYC norms were not common in the past.

Untimely death of the depositor can be another reason. In such cases, either the nominees/ legal heirs are not aware of the existence of such deposits or the bank has not yet intimated them about the demise of the depositor or it does not have their proper communication coordinates to do so. In such instances, banks often classify matured deposits as inoperative or inactive. Savings/current accounts are treated as inoperative/ dormant if there have been no transactions (either debit/credit, induced by either self or third party) for over two years. After an account has stayed inoperative/ inactive, for 10 years or more, banks have to transfer the balances to the DEA Fund maintained by the RBI, along with interest accrued till the date of transfer.

Claims procedure

Apart from sending out periodic communiques to the addresses and email ids available with them, banks also display the list of these accounts on their websites. However, the information is often limited to only the names and addresses of accountholders. The procedure for claiming such deposits is pretty straightforward.

For making a claim, one has to visit the branch of the bank and submit a duly filed (and signed) form along with copies of necessary documents –valid proofs of identity and address. Some banks may additionally require customers to write a letter indicating the reasons for non-operation. The forms also require passport size photos to be attached.

If the deposit holder is no more, then their legal heirs can make a claim in the same form by additionally submitting a copy of the death certificate of the depositor and their legal heirship certificate. But obtaining a legal heirship certificate is easier said than done, especially amidst the pandemic. In cases where the name and date of birth of the nominee has been clearly mentioned at the time of taking the deposit, the nominee won’t require a legal heirship certificate while making the claim.

Even after the money from unclaimed accounts has been transferred to the DEA Fund, customers/ legal heirs can claim the amount from the banks, using the above mentioned procedure. Banks will subsequently make their claims from the RBI (DEA Fund). If the required document proofs have been submitted, banks take about 7-15 days to process any claims on unclaimed deposits.

Added interest

Do note that you continue to earn interest on your forgotten accounts.

Your savings/current accounts continue to fetch you interest at agreed rates, irrespective of whether they are operative or not. For the unpaid proceeds of fixed deposits, interest is paid at the prevailing rate for savings account deposits of the same bank. Post transfer to the DEA Fund, interest shall be paid at rates decided by RBI from time to time.

Following the recent revision in May 2021, the deposits transferred to RBI, will fetch interest at the rate of 4 per cent per annum from the date of such transfer up to June 30, 2018, 3.5 per cent with effect from July 1, 2018 up to May 10, 2021 and at 3 per cent with effect from May 11, 2021 till the time of payment to the depositor/claimant.

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