Cross Check. How to claim unclaimed deposits

A bank account or fixed deposit account is classified as ‘inoperative’ or ‘unclaimed’ if it is not operated, renewed, or withdrawn after 10 years or more from the date of last operation or maturity.

The concern surrounding unclaimed deposits is serious, with the government estimating that banks had ₹5,124 crore in unclaimed deposits lying with them as of December 31, 2013.

Term deposits of over 10 years from the date of maturity are closed at the branch level and the balance in the account is transferred to the head office — unclaimed general ledger. Only the balance gets transferred, not the account.

To get back an unclaimed deposit, the depositor needs to make a claim at the branch where the account or deposit is held. The branch would take up the claim with the head office, as the closed account remains with the branch, though the money would have been transferred to the head office.

On verifying that the claim is genuine, the head office will debit the unclaimed general ledger and transfer the balance to the original branch. The branch will then credit the balance to the depositor’s account.

The RBI has directed banks to display the names and addresses of unclaimed depositors/account holders on the bank’s website.

A depositor can verify whether his/her name is on the list. The central bank also requires banks to furnish the claim procedure on their website.

A customer, if he finds his name on the list, can approach the branch with a request letter for revival/refund of the deposit along with necessary documents as proof of deposit, ‘unclaimed deposit claim form’ and identification to complete the Know-Your-Customer (KYC) norms. The branch has to take up the request with the head office and get the amount back, following the procedure, after ensuring that the claim is genuine.

If a depositor, though his name is not on the list, approaches the branch with documentary proof, then the branch has to help ascertain the correct position of the account and advise the depositor properly. In case the branch is not able to ascertain the position of the account, it should take up the matter with the customer service section, providing full details of the deposit.

In case of a claim by a nominee or legal heir, then proof of being the legal heir will have to be submitted along with identification and address proofs to claim the monies. The maturity proceeds of unclaimed bank fixed deposits will earn only the savings bank rate of interest from the date of deposit maturity.

Fixed deposits with companies are covered by different laws and procedures. The Centre has set up a fund called the Investor Education and Protection Fund (IEPF) under the Companies Act, 1956. Companies are required to transfer to the IEPF the amount of dividend, share application money due for refund, matured deposits, matured debentures and interest accrued on the amounts which remain unclaimed and unpaid for a period of seven years from the due date of their payment.

In May 2012, the Ministry of Corporate Affairs notified rules pertaining to unpaid and unclaimed amounts lying with companies.

Under this, the details of investors whose dividends/fixed deposits/refundable share application money/interest due, etc have remained unclaimed for seven years have to be provided to the Centre and uploaded on the website of the company.

The shareholders or depositors must claim their unclaimed/unpaid amount by making a request to the company, giving their particulars before the same is transferred to the IEPF. Once unclaimed company deposit moves to IEPF, the investor cannot claim it. So, the only window available for the investor is seven years from the due date of deposit.

Claims made against the company or IEPF in respect of the amount that remained unclaimed/unpaid after seven years from the due date are not entertained, and no payment will be made in respect of such claims.

The writer is CEO & Founder, Right Horizons

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