Lost fortune: Unlocking unclaimed deposits
By Bhaskar Nath Biswal
Imagine a treasure chest full of hard-earned money, not buried on a deserted island, but lying dormant within the vaults of India’s banking system. This is the reality of unclaimed deposits, a staggering sum that belongs to ordinary citizens but remains untouched, often forgotten. For an economy striving for financial inclusion and stability, this growing mountain of idle wealth, money that could otherwise fuel consumption, investment, or provide a safety net for families, presents a paradoxical challenge.
Unclaimed deposits are generally defined as the balance in savings or current accounts that have not been operated for 10 years or more or term deposits that have not been claimed within 10 years of maturity. As of June 30, 2025, the total value of unclaimed deposits transferred to the RBI’s Depositor Education and Awareness (DEA) Fund stood at an overwhelming Rs 67,003 crore. A look at the data over the last few years reveals a rapid accumulation: the amount nearly trebled from around Rs 4,500 crore annually to Rs 12,254.29 crore in 2022–23. In 2023-24, the figure was Rs 11,794.17 crore, illustrating a persistent, severe issue that demands urgent attention. Public sector banks account for the lion’s share of this total.
The reasons behind this substantial financial lethargy are multifaceted, stemming from both individual customer behaviour and systemic banking practices. A primary cause is simply the failure to update contact details following a change of address, job or marital status. When a bank attempts to communicate about an inactive account, the correspondence is returned, cutting the thread of connection. Migration, both internal and external, often results in customers opening new accounts in new locations while neglecting to close or maintain minimal activity in old ones. A tragic, yet significant reason is the death of the account holder without leaving a clear nomination or will, leaving legal heirs unaware of the existence of the deposit or unable to navigate the cumbersome claim process due to lack of necessary documents or knowledge. In many cases, especially with small or initial deposits, the amount is simply forgotten by the original depositor, especially when multiple bank accounts are maintained or when a small fixed deposit was made years ago and its maturity passed unnoticed. Lastly, a persistent gap in financial literacy means many customers are unaware of the rules regarding account dormancy, the nomination facility or the procedure for claiming deposits.
Recognising the gravity of the situation, the RBI has initiated several proactive steps to encourage the return of these funds to their rightful claimants. A significant move has been the launch of the UDGAM (Unclaimed Deposits Gateway to Access Information) portal. This centralised web portal allows individuals to search for their unclaimed deposits across multiple banks using a single interface, making the discovery process vastly simpler.
The RBI also mandates banks to proactively identify and contact customers whose accounts have become inoperative and to display the names and addresses of unclaimed account holders on their websites. Furthermore, a recent initiative like the ‘100 Days 100 Pays’ campaign was launched to focus on settling the top 100 unclaimed deposits of every bank in every district within a 100-day period. Most recently, the RBI introduced a year-long incentive scheme for banks, effective October 2025, to encourage them to actively pursue customers for re-activation and return of amounts from the DEA Fund, with differential payouts based on the period of inoperability.
To fundamentally improve the situation, a multi-pronged strategy is required. Banks must embrace digital and automated tracing mechanisms to regularly cross-verify customer data with external databases (while maintaining privacy) and to send timely, persistent electronic alerts to customers about their account status long before it becomes dormant. Regulatory measures should be streamlined further, particularly the claim settlement process, making it simpler for legal heirs to retrieve funds with minimal documentation and without unnecessary delays, perhaps through a standardised, common online application platform linked to UDGAM. Crucially, a mandatory and simple nomination process should be strictly enforced at the time of account opening, with banks required to confirm the validity of nomination details periodically. Finally, government-led nationwide campaigns must be sustained to raise public awareness about the issue.
The writer is a former college principal and founder of Supporting Shoulders.
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