Unclaimed assets: Easy search, not opacity, can cut fraud in India

A long time ago, there was a kingdom where the king’s officers issued promissory notes to citizens, recorded haphazardly with incomplete names and addresses. Over time, many recipients moved away or died, leaving heirs unaware that any assets were due. Some notes eventually acquired substantial value. Unclaimed notes were transferred to the royal treasury, with assurances they would be returned after verification. But the process moved slowly, with paperwork and delays. Officials resisted publishing comprehensive lists, citing fraud and privacy. While actual fraud risk was low, the personal cost to officials of even a few cases was high, so procedures were made deliberately onerous and reunification became a low priority. Predictably, very little money ever found its way back. 

This fable mirrors the real difficulties facing the Aapki Poonji – Aapka Adhikar initiative launched by the Prime Minister, which urges citizens to search for unclaimed assets across four regulatory portals — UDGAM (Unclaimed Deposits – Gateway to Access in India), Bima Bharosa, Mitra, and IEPF (Investor Education and Protection Fund) — covering assets officially estimated at about ₹1.04 trillion. But when one adds the market value of listed shares transferred to the IEPF (around ₹84,000 crore, painstakingly compiled by our firm from company shareholding disclosures: (bit.ly/42RA5kI), unclaimed postal deposit accounts of about ₹32,000 crore (bit.ly/49f8Suh), and inactive Employees’ Provident Fund (EPF) accounts of roughly ₹8,500 crore (bit.ly/3MUkKKL), the stock of unclaimed assets already exceeds ₹2 trillion. 

This initiative is unlikely to result in meaningful restitution because most claimants will fail at the first and most critical stage: Discovering whether any unclaimed assets exist at all. It is precisely at this discovery stage that all four portals fail, though in different ways. 

I tested the largest of them — the IEPF portal — which holds unclaimed assets worth about ₹93,000 crore. I know it holds shares belonging to my late father, currently worth around ₹1.5 lakh in a leading private-sector bank. This is information I obtained through paid private sources. Yet the IEPF search disclosed only the number of shares, without revealing the company name or value — information too sparse to aid discovery. 

The UDGAM portal is even more restrictive, requiring an exact match of name, address, and state before returning any result, making discovery virtually impossible unless the claimant already knows how the record is stored. The Mitra and Bima Bharosa portals suffer from the same flaw: They require prior knowledge of the asset, defeating the purpose of a search portal. 

This raises an obvious question. How, then, were nearly ₹2,000 crore worth of listed shares eventually reclaimed? Until recently, companies were required to publicly advertise transfers to the IEPF, enabling private intermediaries to build searchable databases and proactively contact owners, often for a fee. It is far more likely that, like me, most successful claimants learnt of their unclaimed assets through such private channels than through official portals. 

In stark contrast, overseas jurisdictions adopt the opposite approach. In the US and Australia, searchable databases allow queries using just a name. Australia’s Moneysmart.gov.au even suggests trying surnames alone or common misspellings. A search for “Robert Smith” may yield “Robert James Smith” or “Smith Robert”. 

The special drive launched by banks in 2023 to identify claimants failed, and there is little reason to expect the current effort will fare better. Findings by the Moneylife Foundation (bit.ly/4qlVhYV) show unclaimed bank accounts belonging to EPFO, ESIC (Employees’ State Insurance Corporation), government welfare schemes and even LIC Mutual Fund. If banks cannot trace government departments, expecting them to locate individual claimants is unrealistic. 

Truth be told, given the failure at the discovery stage, it is unnecessary to dwell on claim and settlement processes that are already close to unworkable. India instead needs a centralised Unclaimed Assets Authority with a single mandate: Reuniting assets with rightful owners. To avoid jurisdictional paralysis and reflect the sums involved, it should report directly to the Prime Minister's Office. Its core task should be to maintain a unified, searchable database across asset classes with periodic public disclosure. International experience shows that such transparency reduces fraud rather than increases it. India should adopt these practices. 

The writer heads Fee-Only Investment Advisors LLP, a Sebi-registered investment advisor;  X: @harshroongta