Unclaimed deposits: Heirs must produce succession certificate or probate

For modest balances, banks may accept a legal heirship certificate with indemnity bond

The Reserve Bank of India (RBI) has directed banks to speed up the settlement of unclaimed funds between October and December. Banks held about ₹67,270 crore in unclaimed deposits as of June 2025, according to RBI data presented in Parliament.

 

What is an unclaimed deposit? 

Savings and current accounts are treated as unclaimed if they remain inactive for 10 years. Fixed and recurring deposits are considered unclaimed if proceeds are not collected within 10 years from the maturity date.

 

Once this period has elapsed, banks transfer the money to the Depositor Education and Awareness Fund (DEAF), which is maintained by the RBI. “Customers, or their legal heirs, can still claim these funds from the bank, along with any applicable interest,” says Nishant Singh, chief executive officer and co-founder, BusinessNext.

 

Using the UDGAM portal 

The Unclaimed Deposits – Gateway to Access Information (UDGAM) portal covers the bulk of unclaimed deposits. “It is a centralised platform to help depositors identify unclaimed deposits across multiple banks. Previously, depositors had to approach each bank individually, which was time-consuming,” says Mohit Bagdi, head of investment research and founding member, Mira Money.

 

To search for deposits, users register with their name and mobile number, then enter details such as the account holder’s name, date of birth, and ID proof. “The system searches across participating banks to check for dormant deposits. If a match is found, the depositor or nominee is directed to the relevant bank,” says Bagdi.

 

“UDGAM provides a unique reference number (UDRN) for secure and easy claim processing,” says Singh.

 

Claiming funds from DEAF 

Depositors must visit the bank branch, submit a signed written request or claim form, and provide proof of identification and address. The bank verifies and pays the amount due, including the applicable interest. “After paying the depositor, the bank files a claim with the RBI to get reimbursed from the DEAF,” says Singh. He adds that if the bank is under liquidation, claims are handled through the bank’s liquidator.

 

Depositors do not pay a fee. Instead, they are paid interest on the amount lying in the DEAF. “Currently, the rate is 3 per cent simple interest per annum, effective May 11, 2021, till the date of claim by the depositor,” says Rajat Dutta, founder and initiator, Inheritance Needs Services.

 

Providing the required documentation holds the key. “The bank branch may reject the claim application in case of inadequate evidential documentation,” says Dutta.

 

Procedure for nominees and heirs 

If a nominee exists, banks require the death certificate, identity and address proof, account documents, and claim forms. “A bank is bound under the Banking Regulation Act, 1949, and the RBI’s master circulars on customer service to release funds to the nominee,” says Tushar Kumar, advocate, Supreme Court of India. He observes that the nominee is a trustee and should not presume to be the beneficiary of the funds.

 

In the absence of a nominee or joint account holder, heirs must prove their entitlement through recognised legal instruments such as a succession certificate or probate of the will, if one exists. These two instruments carry the highest legal sanctity. “In case of modest balances, banks may accept a legal heirship certificate issued by the competent revenue authority, along with an indemnity bond,” says Kumar. He adds that if only one heir is making the claim, banks ask for no-objection affidavits from other heirs, supported by indemnities.

 

“If the bank still refuses, the claimant should approach the competent court,” says Alay Razvi, managing partner, Accord Juris.

 

Redress mechanism ladder

• If bank delays or refuses to release deposits, use its grievance redressal system
• Complain to RBI Banking Ombudsman
• Approach consumer forums claiming deficiency in service
• Or, initiate proceedings before civil courts for deposit, interest, and compensatory damage if justified

 

Source: Accord Juris