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SBI and PNB have highest unclaimed deposits


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The amount of unclaimed money held by banks in India has increased significantly during the post-Covid period. Factors contributing to this increase include inoperative or dormant savings accounts and unredeemed fixed deposits. As of March 2023, the total value of unclaimed deposits with scheduled banks in India crossed ₹42,000 crore, which is 2.5 times higher than before the pandemic.

According to granular data from the Reserve Bank of India (RBI), the disruption caused by the pandemic has led to a rise in unclaimed deposits across various types of bank accounts, including current accounts, savings accounts, fixed deposits, and other instruments. As of December 2022, the total value of unclaimed deposits stood at ₹39,900 crore, more than double the amount in December 2019, which was ₹18,379 crore. This increase in unclaimed deposits applies to both public and private sector banks, as well as foreign, regional rural banks, and others.

Breakdown of Unclaimed Deposits by Bank Sector and Individual Banks

Among the different bank sectors, public sector banks hold the majority of unclaimed deposits, with ₹33,303 crore, accounting for 83% of the total as of December 2022. The State Bank of India, the largest public sector lender, holds 2.16 crore accounts with deposits worth ₹8,069 crore. Punjab National Bank follows closely with ₹5,298 crore worth of unclaimed deposits, which is almost five times higher than in 2019.

In the private banking sector, ICICI Bank holds 31.8 lakh accounts with deposits worth ₹1,074 crore as of December 2022. HDFC Bank holds ₹447 crore of unclaimed deposits, which has doubled since 2019. Additionally, DBS Bank, a foreign bank that merged with Lakshmi Vilas Bank, has seen its unclaimed deposits grow from 0.5 crore in 2019 to ₹94 crore in 2022.

Definition and Treatment of Unclaimed Deposits

Deposits in savings or current accounts that have not been operated for ten years or fixed deposits that have not been claimed within ten years from their maturity dates are classified as unclaimed. These unclaimed deposits are then transferred by banks to the Depositor Education and Awareness (DEA) Fund maintained by the RBI. However, depositors are still entitled to claim their money, along with applicable interest, at a later date from their respective banks. Banks are also prohibited from levying penal charges for non-maintenance of minimum balances in accounts classified as inoperative.

Reasons for the Increase in Unclaimed Deposits

Bankers attribute the increase in unclaimed deposits to customers not closing accounts that they no longer intend to use or losing track of accounts when they move to different cities. The pandemic has also contributed to the rise in unclaimed deposits, as some accounts belong to deceased customers who did not nominate anyone to claim the funds. In other cases, nominees have not come forward to make a claim. Claiming the deposits requires physical visits to bank branches, and if the claimant is a legal heir, there is often a significant amount of documentation required, adding to the complexity.

Initiatives to Address the Issue of Unclaimed Deposits

To tackle the issue of unclaimed deposits, the RBI launched an online portal called UDGAM (Unclaimed Deposits-Gateway to Access Information) last year. This portal allows users to search for unclaimed deposits across multiple banks in a centralized manner. As of March 2024, 30 banks are part of UDGAM, hosting information on unclaimed funds. The RBI has also instructed banks to regularly review large unclaimed amounts and proactively reach out to customers in such cases. Analysts suggest that further tech-driven initiatives like the Account Aggregator system, which connects all bank accounts of an individual to a central framework, can help reduce the amount of unclaimed funds held by banks.

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