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Unclaimed deposits in Banks reached Rs 42,270 crore as of March 2023: RBI Data

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PSBs, led by SBI and PNB, hold bulk of unclaimed depositsAs per data from the Reserve Bank of India (RBI) presented in Parliament, unclaimed deposits in public and private sector banks reached Rs 42,270 crore as of March 2023.

  • The COVID-19 pandemic significantly impacted this figure, with unclaimed deposits standing at Rs 39,900 crore in December 2022, more than double the amount from December 2019.
  • These unclaimed deposits span across various banking institutions including public sector, private, foreign, and regional rural banks.

Unclaimed Deposits Overview

Public Sector Banks (PSBs): Hold Rs 33,303 crore (83% of total) as of December 2022.

  • It is highest in State Bank of India (SBI) with 2.16 crore accounts worth Rs 8,069 crore, and followed by Punjab National Bank (PNB) with Rs 5,298 crore, a nearly 5x increase from 2019.

Private Banks:

  • It is highest in ICICI Bank with 31.8 lakh accounts worth Rs 1,074 crore, and followed by HDFC Bank with 447 crore, doubled since 2019.

Foreign Bank:

  • DBS Bank has Increased unclaimed deposits from Rs 0.5 crore in 2019 to  Rs 94 crore in 2022.

What are Unclaimed Deposits?

Accounts inactive for 10 years or term deposits not claimed within 10 years are classified as unclaimed. These funds are transferred to the Depositor Education and Awareness (DEA) Fund maintained by RBI but can be claimed by depositors later with applicable interest. Banks cannot levy penal charges for non-maintenance of minimum balances on inoperative accounts.

Reasons for Increase in Unclaimed deposits:

i.Customers not closing unused accounts or losing track due to migration.

ii.Post-COVID, rise in accounts of deceased customers without nominations.

iii.Complex documentation requirements for legal heirs to claim deposits.

Measures to Address Unclaimed Deposits:

i.RBI launched UDGAM (Unclaimed Deposits-Gateway to Access inforMation) online portal for centralized search of unclaimed deposits. As of March 2024, 30 banks participate in UDGAM.

ii.RBI instructs banks to review large unclaimed amounts and reach out to customers.

iii.Tech-driven initiatives like the Account Aggregator system are recommended to reduce unclaimed funds.

Recent Related News:

i.RBI has revised the eligibility norms for the inclusion of Urban Co-operative Banks (UCBs) in the Second Schedule to the Reserve Bank of India (RBI) Act, 1934. These instructions are issued under clause (a) of sub-section (6) of section 42 of the RBI Act, 1934.

ii.According to data from RBI, there was a sharp increase in the number of micro Automated Teller Machines (ATMs) installed all over India in 2022. However, no major increase in the value of money withdrawn through these devices has occurred since June 2022.

About Reserve Bank of India (RBI):
Governor – Shaktikanta Das
Deputy Governors – Swaminathan Janakiraman, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar
Headquarters– Mumbai, Maharashtra
Establishment– April 1, 1935