India to streamline recovery of unclaimed bank deposits

Banks in India are launching a new system to help people claim over ₹78,213 crore in unclaimed deposits. This initiative is part of new guidelines set by the Reserve Bank of India (RBI) that will take effect on April 1. Under the new rules, banks must show details of unclaimed deposits online. This will include account holder information and a search feature for the public. The goal is to make the process of claiming these funds easier and more efficient. The new process will use standard application forms and required documents for reclaiming deposits. Applicants will need to provide basic information like their name, mobile number, and address. Bank branches will then verify these details and process the claims. A working group formed last year will oversee the implementation of these changes. This group includes experienced bankers and consulted with the RBI and government officials to ensure the new system meets the needs of account holders. By the fiscal year 2026, the online retrieval mechanism will be fully operational. Currently, people who want to check for unclaimed funds must use the RBI's UDGAM portal and then visit their bank branch. The RBI holds funds from accounts that have been inactive for ten years or longer in its Depositor Education and Awareness (DEA) Fund. This fund has seen a 26% increase over the past year. In addition, a recent bill allows accounts to have up to four nominees, a change from the previous limit of just one. Finance Minister Nirmala Sitharaman has urged financial regulators to work on settling unclaimed deposits across all financial sectors, including banks and insurance.