RBI unveils incentive scheme to cut unclaimed bank deposits stock

The Reserve Bank on Tuesday announced a year-long incentive scheme for banks to reduce the volume of unclaimed deposits.

Under the 'Scheme for Facilitating Accelerated Payout' Inoperative Accounts and Unclaimed Deposits', banks will be eligible to get a differential payout depending on the period of an account remaining inoperative and the amount of deposits in it.

"The scheme aims to reduce both the stock of existing unclaimed deposits and fresh accretion of flows to the DEA Fund," an official communique from the central bank said.

"The objective (of the scheme) is to encourage banks to actively pursue customers/ depositors for re-activation of their inoperative accounts and return of their unclaimed amounts lying with Depositors Education Awareness (DEA) Fund to the rightful claimant in a timely and efficient manner," the central bank said.

Unclaimed money in accounts which are inoperative for more than 10 years goes into the depositor education and awareness (DEA) fund, but a depositor can reclaim the money later as well.

As of June this year, the unclaimed deposits stood at over Rs 67,000 crore.

The RBI had earlier launched a dedicated portal called 'UDGAM' to enhance accessibility and simplify the search process for unclaimed deposits.

The incentive scheme for banks announced on Tuesday will run from October 1 to September 30.

Under the scheme, banks will get 5 per cent of the amount or Rs 5,000, whichever is less, for an account which is inoperative for up to 4 years, and the same will go up to 7.5 per cent or Rs 25,000, whichever is less, in case of an account that is inoperative for over ten years, as per the RBI.

The RBI asked banks to submit their claim for payouts on a quarterly basis in the prescribed format within one month at the end of each quarter, and the same was to be signed by a senior executive identified by the top management of a bank.