The amount of unclaimed deposits in both public and private sector banks has increased by 28% to ₹42,270 crore in the financial year 2022-23, according to the data presented by the Ministry of Finance in the Parliament. This is the highest amount of unclaimed deposits ever recorded in the history of Indian banking.
What are unclaimed deposits and why do they matter?
Unclaimed deposits are those deposits that have not been operated by the account holders for 10 years or more. These deposits include savings accounts, current accounts, fixed deposits, recurring deposits, and other types of accounts.
According to the Banking Regulation Act, 1949, banks are required to submit a return of all unclaimed deposits to the Reserve Bank of India (RBI) within 30 days after the close of each calendar year. The RBI then transfers these deposits to the Depositor Education and Awareness (DEA) Fund, which was created in 2014 to promote financial literacy and awareness among depositors.
The unclaimed deposits in the DEA Fund are used for various purposes, such as:
- Providing grants to institutions and organisations for conducting financial education and awareness programmes
- Funding deposit insurance schemes for small depositors
- Supporting research and innovation in banking and financial services
- Enhancing consumer protection and grievance redressal mechanisms for depositors
However, the unclaimed deposits also represent a loss of potential income and wealth for the depositors and their heirs, who may not be aware of the existence or whereabouts of these deposits. Moreover, the unclaimed deposits also indicate a lack of financial inclusion and awareness among a large section of the population, especially in rural and remote areas.
Which banks have the highest amount of unclaimed deposits?
The data presented by the Ministry of Finance shows that the public sector banks (PSBs) have the lion’s share of unclaimed deposits, accounting for ₹38,854 crore or 91.9% of the total amount. The private sector banks (PVBs) have ₹3,416 crore or 8.1% of the unclaimed deposits.
Among the PSBs, the State Bank of India (SBI) has the highest amount of unclaimed deposits, worth ₹8,086 crore, followed by Punjab National Bank (PNB) with ₹5,340 crore, Canara Bank with ₹4,558 crore, and Bank of Baroda (BoB) with ₹3,904 crore. These four banks alone have more than half of the unclaimed deposits in the PSBs.
Among the PVBs, ICICI Bank has the highest amount of unclaimed deposits, worth ₹476 crore, followed by Kotak Mahindra Bank with ₹151 crore, HDFC Bank with ₹142 crore, and Axis Bank with ₹140 crore. These four banks have more than 26% of the unclaimed deposits in the PVBs.
The data also shows that the unclaimed deposits have increased significantly over the years. In 2014, the total amount of unclaimed deposits was ₹5,124 crore, which rose to ₹14,578 crore in 2018, ₹32,934 crore in 2022, and ₹42,270 crore in 2023.
How can depositors claim their unclaimed deposits?
The RBI has launched a web portal called UDGAM (Unclaimed Deposits – Gateway to Access information) in August 2023, to facilitate the public to search and claim their unclaimed deposits across multiple banks in one place. The portal covers 30 banks, which have around 90% of the unclaimed deposits in the DEA Fund.
The portal has been designed to aid the public in identifying their unclaimed deposits/accounts and enable them to either claim the deposit amount or make their deposit accounts operative at their respective banks. The portal also provides information on the process and documents required for claiming the unclaimed deposits.
The RBI has also advised the banks to display the list of unclaimed deposits on their websites and branches, and to contact the depositors or their legal heirs through various modes of communication, such as letters, emails, SMS, phone calls, etc. The banks are also required to provide assistance and guidance to the depositors or their legal heirs for claiming the unclaimed deposits.
The RBI has clarified that the unclaimed deposits are not forfeited by the banks or the RBI, and the depositors or their legal heirs can claim them at any time, even after 10 years. The banks are liable to repay the amount along with the interest accrued, as per the terms and conditions of the deposit contract.
