What Is Causing the Surge in Unclaimed Deposits with Banks?
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Synopsis
The alarming rise in unclaimed deposits, now surpassing Rs 52,174 crore, raises questions about the financial literacy of depositors. With innovative solutions like the UDGAM portal, the RBI aims to bridge this gap. Dive into the details of how these funds are managed and what it means for the future of banking in India.
Key Takeaways
- Unclaimed deposits in India exceeded Rs 52,174 crore in FY24.
- The RBI has launched the UDGAM portal for easier access to information.
- Unclaimed funds with insurance companies totaled Rs 21,718 crore.
- Depositors can claim amounts for up to 25 years after transfer to the SCWF.
- Financial literacy is key to preventing unclaimed deposits.
New Delhi, July 29 (NationPress) The government disclosed on Tuesday that the total of unclaimed deposits with public sector banks (PSBs) and private sector banks (PVBs) has surged to over Rs 52,174 crore during the three fiscal years spanning from 2022 to 2024, marking an increase from Rs 42,271 crore in FY23.
According to the Minister of State for Finance, Pankaj Chaudhary, of this amount, Rs 45,140.78 crore belongs to PSBs while Rs 7,033.82 crore is associated with PVBs in FY24. These funds have been directed to the Depositor Education and Awareness (DEA) fund overseen by the Reserve Bank of India (RBI).
In addition, the Minister noted that the total of unclaimed funds held by insurance companies over the same period reached Rs 21,718 crore.
The RBI's Annual Report reveals that as of March 31, 2024, the overall unclaimed deposits amounted to Rs 78,212.53 crore.
The RBI has introduced a centralized web portal named UDGAM (Unclaimed Deposits-Gateway to Access Information) designed for public use. This platform enables registered users to search for unclaimed deposits across various banks in one convenient location.
The Depositor Education and Awareness Fund Scheme, 2014, established by the RBI, lays out the regulations governing unclaimed deposits and details the fund's utilization, including the promotion of depositors' interests and other objectives as designated by the RBI.
Deposits in savings and current accounts that have been inactive for ten years, as well as term deposits not claimed within ten years of maturity, are classified as Unclaimed Deposits and are subsequently transferred to the DEA fund maintained by the central bank.
The Insurance Regulatory and Development Authority (IRDAI) mandates that all insurers with unclaimed amounts belonging to policyholders for over ten years must transfer these funds, along with interest, to the Senior Citizens’ Welfare Fund (SCWF) annually.
Even after these unclaimed amounts are transferred to the SCWF, policyholders or claimants can still claim their due amounts under respective policies for up to 25 years.
The SCWF is utilized to fund initiatives that promote the welfare of senior citizens, in alignment with the National Policy on Older Persons and the National Policy on Senior Citizens, the Minister elaborated.
Point of View
It is vital to recognize the implications of unclaimed deposits on financial inclusion. The government's push for awareness through portals like UDGAM reflects a commitment to improving depositor education and safeguarding interests. It is essential for citizens to engage with their financial institutions proactively to prevent funds from becoming unclaimed.
NationPress
30/07/2025
Frequently Asked Questions
What are unclaimed deposits?
Unclaimed deposits refer to balances in savings and current accounts that have been inactive for ten years, or term deposits that have not been claimed within ten years of maturity.
How can I check for unclaimed deposits?
You can check for unclaimed deposits using the RBI's UDGAM portal, which allows registered users to search for unclaimed amounts across multiple banks.
What happens to unclaimed deposits?
Unclaimed deposits are transferred to the Depositor Education and Awareness fund maintained by the RBI after a certain period of inactivity.
Can I still claim my unclaimed deposits?
Yes, even after funds are transferred to the Senior Citizens' Welfare Fund, policyholders can claim their amounts for up to 25 years.
What is the purpose of the Senior Citizens’ Welfare Fund?
The SCWF is used to promote the welfare of senior citizens through various schemes aligned with national policies.
