Source: BS
Context:
India’s unclaimed bank deposits have risen sharply, highlighting growing challenges in financial awareness, account dormancy, and beneficiary identification, even as the government has launched targeted recovery initiatives.
What are Unclaimed Bank Deposits?
An unclaimed bank deposit refers to money that has been deposited in a bank account but has not been accessed, withdrawn, or claimed by the account holder for a specified period. These can be in the form of savings accounts, fixed deposits (FDs), recurring deposits, or other bank instruments.
Key Features of Unclaimed Bank Deposits
- Dormancy:
- Accounts with no transactions for a prolonged period (usually 24–36 months) are classified as dormant.
- Once dormant, the balance is considered unclaimed until the account holder or nominee claims it.
- Types of Unclaimed Deposits:
- Savings account balances
- Fixed deposits and recurring deposits
- Interest accrued but unpaid
- Matured deposits not withdrawn
- Regulatory Guidelines:
- In India, the Reserve Bank of India (RBI) requires banks to transfer unclaimed deposits to a designated fund if not claimed for a long period.
- Banks must also attempt to inform and locate the account holder or nominee.
- Claiming Process:
- Account holders or their nominees can claim unclaimed deposits by submitting KYC documents and proof of ownership.
Recovery Efforts by the Government
‘Your Money, Your Right’ Initiative
- Announced by Prime Minister Narendra Modi on December 10
- Amount returned to rightful owners: Nearly ₹2,000 crore
- This represents about 3% of total unclaimed deposits as of June 30, 2025
Special Recovery Campaign
- Launched by: Finance Minister Nirmala Sitharaman
- Duration: Three months (starting October)
- Objective:
- Facilitate identification of rightful claimants
- Speed up recovery of dormant and unclaimed balances
Why Unclaimed Deposits Are Rising
- Increase in number of bank accounts due to financial inclusion drives
- Dormant accounts with no transactions over long periods
- Lack of nominee details or updated KYC
- Death of account holders without timely claim by heirs
