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Banks sitting on Rs1,200 cr lying in idle accounts

Banks sitting on Rs1,200 cr lying in idle accounts
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First Published: Wed, Sep 10 2008. 03 51 PM IST
Updated: Wed, Sep 10 2008. 03 51 PM IST
New Delhi: Commercial banks in the country are sitting on funds of over Rs1,200 crore lying idle in about two crore accounts for the past 10 years.
This is despite a circular issued by Reserve Bank of India (RBI) in November 1989 instructing banks to trace customers or the legal heirs of unclaimed accounts.
The disclosure was made in reply to a RTI plea filed by one Sidharth Misra, a resident of Cuttack in Orissa.
As per the reply, an amount of Rs1207,35,54,334.23 is lying idle with banks spread across India. This unclaimed amount belongs to 1,74,38,100 account holders.
According to the reply given by the RBI, quantum of unclaimed deposit is highest in the rural regional banks category. It comes to an amount of Rs1156,98,70,277.68.
“The banks take this order in letter and not in spirit and wash their hands off by sending a simple letter to the account holder,” an RBI official said on the condition of anonymity.
“I feel this huge quantum of money is lying idle with the banks and will also lie idle in the near future because the right heir to the unclaimed money is not aware about it,” Misra said.
He further added that the RTI was filed after many widows in Cuttack complained that the banks were reluctant to give them their rightful dues. It is the also responsibility of the banks to trace either the account holders or the rightful claimants.
“The sum total of accounts lying unclaimed with the country’s largest public sector bank — the SBI Group, nationalised banks and private banks and foreign banks has mounted to Rs1050,16,66,467.52 for a total of 1,03,33,882 account holders,” said the reply provided by the department of administration and personnel management, RBI, Mumbai.
Nationalised banks account for the highest unclaimed amount, totalling Rs794,17,41,124.18. The number of idle accounts for the past 10 years for these banks is 72,45,581.
“The bank should take serious note of these account holders who do not fill up the nominee category in the bank forms. Despite rules which make it compulsory to fill the nominee form, many banks do not insist and as such when the account holder disappears/dies, the money stays with the bank for an indefinite period,” Misra reasons.
The data given by RBI enumerates 10 years starting from the year 1996-2006.
“Claiming such money is a tedious task. There are a lot of procedures and formalities like proving your identity and sifting through old data which deters the genuine claimant of her/his legitimate money,” said Misra.
“Moreover, if the amount is equal to the fine charged by the bank, it is no point claiming such money,” a senior bank official said.
Some of the prominent banks that have inoperative accounts include State Bank of India, Bank of India, Central Bank, Canara Bank, ICICI Bank, ING Vysya Bank, Kotak Mahindra Bank, ABN Amro, American Express Bank, BNP Paribas, Citibank, Honkong and Shanghai Banking Corp Ltd and Standard Chartered Bank.
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First Published: Wed, Sep 10 2008. 03 51 PM IST
More Topics: RTI | RBI | Banks | Cuttack | Idle |