The Reserve Bank of India (RBI) has recently issued comprehensive guidelines aimed at banks to manage and categorize accounts and deposits as either inoperative or unclaimed. The central bank has outlined measures for banks to undertake, covering various aspects of handling such accounts and deposits. The primary focus is on tracing customers, including their nominees or legal heirs, of inoperative accounts or unclaimed deposits. The goal is to facilitate the reactivation of accounts, settlement of claims, or closure.
One of the key directives from the RBI emphasizes the need for a periodic review of these accounts and deposits. This involves taking steps to prevent fraud associated with such accounts or deposits. Additionally, the guidelines stress the importance of establishing grievance redressal mechanisms to ensure the expeditious resolution of customer complaints.
These instructions from the RBI are intended to complement the ongoing efforts of both banks and the central bank itself to reduce the volume of unclaimed deposits within the banking system. The ultimate objective is to return these unclaimed deposits to their rightful owners or claimants. According to the rules set forth, any deposit account with a credit balance that remains inactive for ten years or more, or any unclaimed amount for the same duration, must be transferred by banks to the Depositor Education and Awareness (DEA) fund maintained by the RBI.
Applicable to all commercial banks, including regional rural banks, and cooperative banks, these revised instructions are set to take effect from April 1, 2024. The RBI has been proactive in addressing the issue of unclaimed deposits. Last year in August, the central bank launched a Centralized Web Portal called UDGAM (Unclaimed Deposits – Gateway to Access Information). This portal facilitates the public in searching for their unclaimed deposits across multiple banks in one centralized location.
The RBI’s decision to issue comprehensive guidelines stems from the increasing trend in the number of unclaimed deposits. In response, the central bank has been actively conducting public awareness campaigns to sensitize people to this matter. The RBI encourages individuals to identify and approach their respective banks for claiming any unclaimed deposits.
