What is Unclaimed Deposits?

My sister is a financial advisor and also my biggest guide. She keeps me updated with all the new financial terms and advancements in the finance sector. It was just a few weeks back that she told me what is unclaimed deposits in banks. If you are looking forward to understanding unclaimed deposits, I am here to help you. The eight states with the most unclaimed deposits have been the focus of a national effort by the Reserve Bank. As a result, the finance ministry has started a campaign in Hindi, English, and the languages of such eight states. According to the central bank's annual report, the amount of unclaimed deposits in banks has drastically increased to Rs 48,262 crore in FY22 from Rs 39,264 crore in the previous fiscal.

What is unclaimed deposits?

According to an RBI official, the majority of this money is held by banks in Tamil Nadu, Punjab, Gujarat, Maharashtra, Bengal, Karnataka, Bihar, and Telangana/Andhra Pradesh. As a result, the finance ministry has started a campaign in Hindi, English, and the language of eight states. According to RBI regulations, funds in savings/current accounts that have not been used for 10 years or funds in term deposits that have not been repaid within 10 years of the maturity date are referred to as "unclaimed deposits." Following that, banks transfer this money to the Reserve Bank of India's "depositor education and awareness fund" (RBI).

Unclaimed deposits in banks

However, the depositors are still qualified to obtain their funds from the bank later on, along with any appropriate interest. However, despite occasional public awareness initiatives launched by banks and the RBI, the volume of unclaimed deposits has been exhibiting an upward trend, according to the central bank. The number of unclaimed deposits is primarily the result of depositors failing to close savings or current accounts that they no longer intend to use or failing to file reclamation requests with banks for fixed deposits that have reached maturity. There are also instances where the nominees or legal heirs of accounts belonging to expired depositors fail to step forward to claim the money.

The campaign's goal, according to the central bank, is to make it easier for such depositors—or the nominees or legal heirs of deceased depositors—to locate and retrieve their accounts.

How to Claim Unclaimed Deposits?

You must first file the unclaimed deposit application form at the bank branch that is closest to you.

There are four circumstances in which you may be qualified to receive the money:

• This is just for you.

• You are the candidate.

• As the legitimate heir, you

• Another justification

In any scenario, you must enclose supporting documentation with your form proving that you are the rightful successor, nominee, or account owner. Remember that prior to the claims being satisfied, the bank will examine and verify your paperwork. You must therefore produce genuine, original documents together with identification and address proof.

If you have a good reason, it is relatively convenient to reclaim unclaimed deposits from banks. You can find out if users or any of their relatives own an inactive/unclaimed account by performing a quick search on the bank's website. Even before a claim can be settled, you will be required to provide all the required documentation, which will then be confirmed.

I hope now you understand what is unclaimed deposits in banks.