Global Fintech Fest: FM Sitharaman asks financial entities to ensure customers nominate heirs

Finance Minister asks banks and financial entities to encourage customers to nominate heirs to reduce unclaimed money.

Livemint
First Published5 Sep 2023
Union Finance Minister Nirmala Sitharaman
Union Finance Minister Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman on Tuesday asked banks and other financial entities to ensure that their customers nominate hiers which can help reduce the quantum of unclaimed money.

Finance Minister Sitharaman on Tuesday inaugurated an exhibition at the Gloab Fintech Fest in Mumbai, Maharashtra.

During the event the FM said, "I want the banking system, the financial ecosystem (including) the mutual funds, stock markets... everybody to keep in mind that when someone deals with his (customer's) money, the organisations will have to think about the future and ensure that they (customers) nominate their heir, give the name and address".

The theme of Global Fintech Fest 2023 is, 'Global Collaboration for a Responsible Financial Ecosystem: Inclusive, Resilient, and Sustainable'.

As per a report, the banking system alone has over 35,000 crore of unclaimed deposits, while the overall quantum of the unclaimed money is said to be more than 1 lakh crore.

Further, the finance minister spoke about how Several Indian cities beyond the top 30 have seen an increase in wealth generation in the last few years.

Sitharaman said, "The top 30 cities of India are usually expected to be ahead in formal savings. However, in the last four years, the share of cities beyond the top-30, in total mutual fund assets has grown from 15% to 26%. So it's the beyond-30 cities that are contributing to India's financial ecosystem".

She said that instruments like Systemic Investment Planning (SIPs) are only democratising this wealth-creation opportunity. According to the finance minister, financial technology firms are driving more "inclusion and creating their niche".

"There was a time when conventional financial activities were the backbone of the financial ecosystem but today FinTech has become a more robust & dynamic financial inclusion tool," Sitharaman added.

The finance minister also said that it is essential to build a responsible financial ecosystem, and added that one laggard can cause a disruption.

Sitharaman also said that tax havens and round-tripping of money are a threat to the responsible financial ecosystem.

She asked fintech companies to invest in cybersecurity and said that trust is very important.

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