Reduce unclaimed assets: FM Sitharaman to financial sector regulators

At the 29th FSDC meeting, FM Nirmala Sitharaman pushed for swift return of unclaimed financial assets and called for simplified, unified KYC norms across all sectors

Union Finance Minister Nirmala Sitharaman on Tuesday asked financial sector regulators to take necessary steps to reduce unclaimed assets in the sector, such as bank deposits, dividends, shares, post office accounts, insurance, and pension funds, etc.

 

She also asked the regulators to ensure expeditious and seamless refund of such assets to rightful owners.

Sitharaman made the statements while chairing the 29th meeting of Financial Stability and Development Council (FSDC) held in Mumbai. The FSDC deliberated on emerging trends in the domestic and global macro-financial situation and stressed the need to remain vigilant.

 

“The council recognised the need for proactive efforts to mitigate potential risks to financial stability while adopting adequate safeguards for the financial system’s resilience,” the Press Information Bureau said in a release.

 

 

The members decided to strengthen inter-regulatory coordination for wider development of the financial sector.

 

Sitharaman also urged regulators and departments to expedite the refund process of unclaimed amounts by holding special district-level camps. 

 

“This drive is to be conducted in coordination with the Reserve Bank of India (RBI), Securities and Exchange Board of India (Sebi), Ministry of Corporate Affairs, Pension Fund Regulatory and Development Authority (PFRDA), and Insurance Regulatory and Development Authority (Irdai), along with banks, pension agencies, insurance companies, etc.,” the release said.

 

“The unclaimed amounts comprise deposits in banks, unclaimed shares and dividends managed by IEPFA (Investor Education and Protection Fund Authority), and unclaimed insurance and pension funds with Irdai and PFRDA, respectively,” it added.

 

The FM exhorted the council to take proactive steps to offer citizens a seamless experience with know your customer (KYC) processes across the financial sector. Discussions included prescribing common KYC norms and simplifying and digitising the KYC process, including digital onboarding for Non-Resident Indians, Persons of Indian Origin, and Overseas Citizens of India in the Indian securities market.

 

The FSDC also discussed formulating strategies to implement previous decisions and Budget announcements, such as establishing an appropriate framework to evaluate and enhance the responsiveness of regulations and subsidiary instructions.

 

The meeting also reviewed trends in financing flows as part of a strategy to increase the investment ratio and discussed measures to expand the reach of factoring services and improve the effectiveness of account aggregator networks.

 

The meeting was attended by RBI Governor Sanjay Malhotra; Finance and Department of Economic Affairs Secretary Ajay Seth; Sebi Chairperson Tuhin Kanta Pandey, and Irdai Member (Actuary) Parmod Kumar Arora, among others.