Bank Reports 26% Increase in Unclaimed Deposits of Rs 78,213 Crore

RBI Annual Report: Unclaimed deposits in banks surged by 26%, reaching Rs 78,213 crore, prompting comprehensive guidelines for resolution.

The Reserve Bank of India’s (RBI) Annual Report for the fiscal year ending March 2024 unveiled a concerning trend as unclaimed deposits held by banks soared by 26 per cent year-on-year, reaching a staggering Rs 78,213 crore. This notable increase highlights the magnitude of dormant funds within the banking system, underscoring the need for concerted efforts to address this issue.

Magnitude of Unclaimed Deposits

Comparatively, the amount held in the Depositor Education and Awareness Fund stood at Rs 62,225 crore as of March 2023, signaling a substantial rise in unclaimed deposits over the past year. Unclaimed deposits typically originate from dormant accounts inactive for a period of 10 years or more, which banks, including cooperative banks, transfer to the RBI’s Depositor Education and Awareness (DEA) Fund.

RBI’s Proactive Measures

In response to this concerning trend, the RBI issued comprehensive guidelines earlier in the year aimed at aiding account holders and streamlining procedures regarding inactive accounts. These guidelines encompassed measures such as classifying accounts and deposits as either inactive or unclaimed, conducting regular reviews of such accounts, implementing fraud prevention measures, and establishing grievance redress mechanisms for prompt complaint resolution.

Facilitating Account Reactivation and Closure

The RBI also emphasized proactive steps to locate customers of inactive accounts or unclaimed deposits, including their nominees or legal heirs, to facilitate account reactivation, settlement of claims, or closure. Additionally, procedural steps were outlined to guide banks in this endeavor, aiming to expedite the return of unclaimed deposits to their rightful owners.

Updated Guidelines and Implementation

The updated guidelines, which came into effect from April 1, 2024, apply to all commercial banks (including Regional Rural Banks) and cooperative banks. Furthermore, to simplify the process for depositors to search for unclaimed deposits across various banks in a centralized manner, the RBI introduced a web portal named UDGAM—Unclaimed Deposits Gateway to Access Information.

The surge in unclaimed deposits underscores the importance of proactive measures to address this issue and ensure the rightful return of funds to depositors. By issuing comprehensive guidelines and leveraging technological solutions like the UDGAM portal, the RBI aims to streamline processes, enhance transparency, and facilitate the efficient management of unclaimed deposits within the banking system. These efforts align with the broader objectives of promoting financial literacy, protecting depositor interests, and fostering trust and confidence in the banking sector.

Aryan Jakhar
Aryan Jakhar
Aryan Jakhar, an Indian journalist, founded Business Headline and The Shining Media Group. Previously, he contributed to Indian media outlets including BusinessUpturn, Inc42, and the India Today Group.

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