In Banks, there is a lot of unclaimed deposit lying since decades. What this means – Customer deposited his money in Bank but now there is no transaction in that account and there is no response from customer. This may happen normally when a customer dies and his legal heirs are not aware of the deposits in Banks.
These deposits, which have been inactive for years, now have increased to more than ₹78,213 crore. The government is worried and has asked Banks to find a solution to clear this deposit. As per the sources, Banks across India will soon introduce a new system to help customers or their nominees recover unclaimed deposits.
Accounts that remain inactive for 10 years or more are transferred to the RBI’s Depositor Education and Awareness (DEA) Fund. As of March 2024, the total unclaimed amount in this fund has increased by 26% compared to the previous year.
New Rules from RBI Effective April 1
The Reserve Bank of India (RBI) has introduced new rules for unclaimed deposits and inactive bank accounts. From 1st April, banks must display details of these unclaimed deposits on their websites. This will include account holder information and a search feature for the public to check if they have any unclaimed money.
To make the process easier, banks will use standard forms and require the same set of documents for all claims. Customers or their nominees will need to provide basic details like:
- Full Name
- Mobile Number
- Address
Once the form is submitted, the bank branch will verify the details and process the request.
Fully Online Process from 2026
A special working group, consisting of senior bankers, was set up last year to find ways to speed up the process of settling unclaimed deposits. This group recommended setting up an online system so that customers can search the deposits and know whether it belongs to them or not. Through this online system, customers will not have to visit the branches of banks and all the process can be carried out smoothly. These recommendations have been accepted, and by the financial year 2026 (FY26), an online system will be fully functional to help customers retrieve their funds without visiting a bank branch.
Public sector banks have created a standard process that will also be shared with private banks through the Indian Banks’ Association. This ensures that all banks will follow the same procedure.
How Will the New System Work?
- Customers will fill out a form with their details.
- The concerned bank branch will contact them for any additional verification.
- Once verified, the bank will transfer the unclaimed amount to the customer’s account.
Currently, customers can check unclaimed deposits through the RBI’s UDGAM portal, but they still have to visit their bank branch to claim the money.
New Banking Laws to Help Account Holders
To address this issue, recently the government has also made amendments to Banking Laws Bill. The Banking Laws (Amendment) Bill, 2024, introduced in August, allows account holders to nominate up to four people for their bank accounts. Earlier, only one nominee was allowed.
Finance Minister Nirmala Sitharaman has also directed financial regulators to launch a special drive to settle unclaimed deposits. This effort will cover not just banks but also shares, dividends, mutual funds, and insurance policies.
These new rules and systems aim to make it easier for people to reclaim their money and reduce the number of unclaimed deposits in India.
