It’s time to claim your forgotten deposits kept with banks
2 min read . Updated: 19 Jul 2022, 06:02 AM IST
Premium- The reasons for such unclaimed deposits with banks are varied but there is no time limit for filing your claims
The Reserve Bank of India (RBI) has been running an ad campaign with actor Amitabh Bachchan urging people to get back their unclaimed deposits from banks. As of March 2021, such deposits totalling ₹39,264 crore are lying in the RBI’s Depositor Education and Awareness Fund (DEAF) .
Being forgetful costs
Before laying claim to any unclaimed deposits, let’s take a look at its precursor —inoperative accounts. Rajat Dutta, founder, Inheritance Needs Services, says savings and current accounts are treated as inoperative or dormant if there are no transactions (either by the customer or any third party) in such accounts for more than two years.
Recurring and fixed deposits become inoperative if the amount remains unclaimed even after two years of maturity unless they are on automatic renewal. Eight years after an account (savings / current / deposits) gets tagged as inoperative, the amount in such an account is transferred to DEAF as an unclaimed deposit.
Once an account turns inoperative, the amount in it earns simple interest at that bank’s prevailing rates and no compounding of interest applies.
Once the amount is transferred to DEAF, it earns simple interest at the rate declared by RBI at regular intervals (with effect from 11 May 2021, this has been pegged at 3% ).
As highlighted by Dutta, and Vikash Jain, co-founder, Share Samadhan, some of the reasons for such unclaimed deposits are: the demise of the account holder, with family members being unaware of any deposits; wrong communication address; and the lack of a nominee for the account.
Historically, they point out, only the names of nominees were mentioned in bank documents, making it difficult for the lender to trace them after the account holder’s death. Lenders now seek all details about nominees in their nomination request forms.
Filing claims
Nominees need to submit the death certificate of the account holder, besides their own KYC documents, to claim the amount in inoperative accounts. In case of a joint account, the bank will delete the name of the deceased from the account or open a fresh account for the survivor (after submission of the death certificate and other documents).
In the absence of a nominee though, the person filing the claim will also have to produce one of the following documents: heirship certificate (in case of small amounts) or a succession certificate or letter of administration (for large sums) if there is no will. In case there is a will, it should be probated.
There is no time limit on filing of such claims. A bank, however, must settle any such request within 15 days of the claim being filed , according to Dutta. He however, adds, “Getting documents such as a succession certificate, or probating a will, which is a legal process, takes time."
In case of unclaimed deposits with DEAF too, one can file a claim with the bank concerned. Jain says information relating to unclaimed deposits are put on websites of most banks. You will be required to key in some basic information such as the name, address, PAN, date of birth, etc., of the account holder to find out if there is an unclaimed deposit.
“After due diligence, banks are obliged to pay the claimant the legitimate outstanding amount along with interest," says Dutta. But, this process, too, can be complex in the absence of any nomination.
