RBI Tackles Unclaimed Deposits in India

December 16, 2024

The Reserve Bank of India (RBI) has initiated measures to address the growing issue of unclaimed deposits, arising from inactive savings or current accounts, as well as unclaimed term deposits. The RBI aims to safeguard depositor interests while facilitating the reclamation of these funds.

Definition of Unclaimed Deposits

Unclaimed deposits refer to funds in accounts that have not seen any activity for over ten years. This includes savings accounts with balances and term deposits that remain unclaimed after maturity.

Various factors contribute to unclaimed deposits. Accounts may remain open without closure, fixed deposits can go unclaimed, or heirs may not claim funds from deceased account holders.

Growth of Unclaimed Deposits

Data from 2018 to 2022 indicates a steady increase in unclaimed deposits, with savings accounts accounting for 73% of the total. The RBI’s Depositor Education and Awareness (DEA) Fund rose from ₹62,224.89 crore in 2022-23 to ₹78,212.53 crore in 2023-24.

Initiatives for Claiming Deposits

To assist depositors and heirs, the RBI mandates banks to publish lists of unclaimed deposits on their websites. These lists include names and addresses but omit sensitive information like account numbers.

In May 2023, the RBI launched the 100 Days 100 Pays campaign to expedite the settlement of unclaimed deposits. This initiative targets the top 100 unclaimed deposits in each district and has been extended until April 1, 2024.

The UDGAM portal, introduced in August 2023, allows individuals to search for unclaimed deposits across multiple banks. Users can search using the account holder’s name and bank details.

New Rules for Inactive Accounts

In January 2024, the RBI established new regulations for identifying inactive accounts. Banks must review accounts annually and notify account holders about inactivity through various communication methods.

Banking Laws (Amendment) Bill, 2024

This bill permits up to four nominees for bank deposits and locker items, establishing a hierarchy for nominations. The State Bank of India has requested rule changes, suggesting that non-financial activities should keep accounts active, particularly those linked to government payments. The RBI continues to push for the reduction of inactive accounts while promoting easier updates for customer details through digital platforms.

GKToday Facts for Exams:
UDGAM Portal The UDGAM portal, launched in August 2023, enables users to search for unclaimed deposits across multiple banks using the account holder’s name and bank details.
DEA Fund The Depositor Education and Awareness (DEA) Fund, managed by RBI, grew by 26% from ₹62,224.89 crore in 2022-23 to ₹78,212.53 crore in 2023-24, reflecting rising unclaimed deposits.
100 Days 100 Pays The 100 Days 100 Pays campaign, initiated in May 2023, aims to resolve unclaimed deposits by settling the top 100 unclaimed deposits in each district.
Banking Laws (Amendment) Bill, 2024 The Banking Laws (Amendment) Bill, 2024, allows up to four nominees for bank deposits and items in lockers, establishing rules for prioritising nominations.

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