Context:
The Securities and Exchange Board of India (SEBI) has announced a partnership with the government’s DigiLocker platform.
- The objective is to help reduce unclaimed financial assets in the securities market.
- Investors can now store and access key financial documents such as:
- Demat account holdings
- Mutual fund statements
- Consolidated Account Statements (CAS)
directly through DigiLocker.
Unclaimed financial assets
Unclaimed financial assets are funds or financial instruments that remain inactive, dormant, or unclaimed by their rightful owners for a legally defined period, such as bank deposits, shares, insurance policies, or dividends.
- Unclaimed financial assets (UFAs) are assets that have been left unclaimed or inactive by their rightful owners for a period of time, often defined by law.
- Examples:
- Bank deposits: Savings, current accounts, or fixed deposits that haven’t been accessed for a certain period.
- Shares and dividends: Unclaimed dividends from stocks or collective investment schemes.
- Insurance policies: Life policies or endowment policies where payouts remain uncollected after maturity.
- Other financial assets: Mobile money accounts, unclaimed wages, or utility refunds.
New Features for Investors
- SEBI’s circular states that:
- Investors using DigiLocker can automatically fetch their CAS on January 1st each year.
- This feature aims to ensure investors regularly review and track their financial assets, reducing the likelihood of assets becoming unclaimed.
- Previously available documents in DigiLocker include:
- Bank account statements
- Insurance policy certificates
- New Pension Scheme (NPS) account statements
Impact of SEBI-DigiLocker Collaboration
- The move is expected to:
- Increase financial awareness among investors.
- Provide a secure, centralized repository for key investment documents.
- Minimize unclaimed investments due to forgotten or misplaced statements.
- Boost the adoption of paperless financial documentation.
Digital Push for Better Asset Tracking
- SEBI’s partnership with DigiLocker is part of a broader effort to enhance financial literacy, investor convenience, and reduce unclaimed financial assets in the capital markets.
- This initiative complements existing features of DigiLocker and aligns with India’s digital financial inclusion goals.
