While risk-averse investors prefer to park money in bank fixed deposits, over the years the amount of unclaimed deposits has risen significantly. Similarly, unclaimed amounts in savings and current accounts, too, are growing. Accounts become inoperative when no money is deposited or withdrawn for a specified period of time.
Data from the RBI shows as on end-December 2012, Rs 2,474 crore of unclaimed amount is lying in savings accounts with banks in 1.09 crore accounts. In current accounts, Rs275 crore is lying unclaimed in 4.42 lakh accounts and Rs 482 crore in fixed deposits in 8.42 lakh accounts across all scheduled commercial banks in the country. Bank-wise, the largest lot of unclaimed deposits in savings accounts is with State Bank of India and its associates with R584.5 crore lying in 17 lakh savings accounts.
Banks classify a term-deposit account as unclaimed if the amount is not renewed or withdrawn for ten years or more from the date of maturity. The unclaimed term-deposit account is closed at the branch level and the amount is transferred to the head office. The current account, savings account (CASA), which has completed 10 years from the date of the last operations, other than interest credits and service charge debits, are marked as unclaimed deposits and the money in the inoperative accounts is transferred to the bank’s suspense account.
In fact, last year Reserve Bank of India had directed all banks to display the names of people who have not claimed their term deposits or haven’t operated their CASA account. “Keeping in view the public interest, it has been decided that banks should play a more proactive role in finding the whereabouts of the account holders of unclaimed deposits/inoperative accounts. Banks are, therefore, advised that they should display the list of unclaimed deposits/inoperative accounts which are inactive/inoperative for ten years or more on their respective websites,” the central bank said in a statement.
Banks have started displaying the names and addresses of the customers who have unclaimed deposits. However, the account number, its type and the name of the branch are not disclosed on the banks’ website. In case the accounts are not in the name of individuals, the names of individuals authorised to operate the accounts are indicated.
The central bank also directed banks to give information on the process of claiming the unclaimed deposit or activating the inoperative account and the necessary forms and documents for claiming the same.
The central bank had also asked the banks to put in place adequate operational safeguards to ensure that the claimants are genuine.
How to claim the deposits
The process for claiming or activating the unclaimed deposit involves a few steps. The account holders, after checking their names and addresses on the list of unclaimed deposits displayed on the bank’s website, will have to visit the branch where the account is maintained. The account holder will have to submit the claim form along with details of the account like pass book or statements of account, term deposit receipts, recent photographs, know your customer documents like a valid identity and address proof along with the originals for verification.
The bank branches will directly process the application for payment of unclaimed deposit and pay the amount after due diligence and KYC compliance of up to R1 lakh. For the balance amount over R1 lakh, the branches will obtain sanction from their controllers before the activation of the amount or payment of balance. In case the claim is done by a legal heir or a nominee, then the person will have to visit the branch and submit the unclaimed deposits claim form filled in and signed and submit documents like passbook, or term deposit receipts, valid identity proof of the claimant and a copy of death certificate of the account holder.
For claim of non-individual accounts, including proprietorship and Hindu Undivided Family (HUF), the claim forms will be submitted on the company’s letter head signed by authorised persons along with a valid identity proof. Banks do not charge any money to the account holders to reactivate inoperative accounts. In case of any grievances, customers can lodge their complaints to the branch-in-charge and the authority will have to resolve the matter within seven days.