Lok Sabha Question No. 1185 (UNSTARRED), answered on 2017-12-22
Subject: Unclaimed Deposits in Various Banks
Ministry: FINANCE
Asked by: ANJU BALA, B. SREERAMULU, Tejpratap Singh,Yadav

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

TO BE ANSWERED ON FRIDAY, DECEMBER 22, 2017/PAUSHA 01, 1939 (SAKA)

## UNSTARRED QUESTION NO. 1185 UNCLAIMED DEPOSITS IN VARIOUS BANKS

1185. SHRIMATI ANJU BALA: SHRI B. SRIRAMULU: SHRI TEJ PRATAP SINGH YADAV:

Will the Minister of FINANCE be pleased to state:

- (a) whether huge amount are lying as unclaimed deposits in various banks, insurance companies  and  other  financial  institutions  of  the  country  and  if  so,  the  details thereof, bank/company-wise;
- (b) whether the Government has formulated any norms to deal with such unclaimed deposits in banks and other financial institutions and if so, the details thereof;
- (c) whether the Government has any proposal to utilise such unclaimed deposits for developments of social sectors in the country and if so, the details thereof; and
- (d) the steps taken by the Government in this regard so far?

## ANSWER THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SHIV PRATAP SHUKLA)

(a): The details of the unclaimed deposits reported by various banks under Section 26 of Banking Regulation Act (BR Act), 1949 are follows:

| As of      |   Unclaimed Deposits (Rs. in crores) |
|------------|--------------------------------------|
| 31.12.2014 |                              4998.27 |
| 31.12.2015 |                              6835.4  |
| 31.12.2016 |                              8864.56 |

The  details  of  the  unclaimed  amount  reported  by  the  life  and  non-life  insurance companies are under:

| As of   | Unclaimed Deposits (Rs. in crores)   | Unclaimed Deposits (Rs. in crores)   |
|---------|--------------------------------------|--------------------------------------|
| Life    | Insurers                             | Non-Life Insurers                    |
| 5439.97 | 1787.26                              | 31.03.2015                           |
|         | 10527.17 1198.28                     | 31.03.2016                           |
|         | 10471.51 897.46                      | 31.03.2017                           |

The details of the unclaimed amount reported by various Housing Finance Companies (HFCs) are under:

|   As of | Unclaimed Deposits (Rs. in crores)   |
|---------|--------------------------------------|
|  755.46 | 31.03.2015                           |
|  692.44 | 31.03.2016                           |
|  972.47 | 31.03.2017                           |

(b) to (d): In pursuance of the amendment of the BR Act, and insertion of section 26A, the Reserve Bank of India (RBI) has framed the Depositor Education and Awareness Fund (DEAF) Scheme, 2014. Under the provisions of this Scheme, the amount to the credit of any account in India with any bank which has not been operated upon for a period of ten years or any deposit or any amount remaining unclaimed for more than ten years shall be credited to the Fund, within a period of three months from the expiry of the said period of ten years. The depositor would, however, be entitled to claim from the bank her deposit or any other unclaimed amount or operate her account after the expiry of ten years, even after such amount has been transferred to the Fund. The bank would be liable to pay the amount to the depositor/claimant and claim refund of such amount from  the  Fund.  RBI  has  issued  guidelines  from  time  to  time  and  has, inter-alia ,  laid down following norms:

- i. The  rate  of  interest  payable  by  banks  to  the  depositors/  claimants  on  the unclaimed  interest  bearing  deposit  amount  transferred  to  the  fund  shall  be  4% simple interest per annum until further notice.
- ii. The special efforts may be made to trace the customers in respect of inoperative accounts.
- iii. Banks to display the list  of  unclaimed  deposits  /  inoperative  accounts  which  are inactive for ten years or more on their respective websites.

National  Housing  Bank  (NHB)  in  its  Master  Circular  dated   01.07.2017   issued  to  all HFCs has  advised  to  include  following  information  on  the  unclaimed  deposit  in  their Board's Report:

- (a) The total  number  of  accounts  of  public  deposit  of  the  housing  finance  company which have not been claimed by the depositors or not paid by the housing finance company after the date on which the deposit became due for re-payment; and
- (b) The  total  amounts  due  under  such  accounts  remaining  unclaimed  or  unpaid beyond the dates referred to in clause (a) as aforesaid.

Insurance  Regulatory  and  Development  Authority  of  India  (IRDAI) vide circular  dated 25.07.2017 has laid down the norms for dealing with unclaimed amount. A summary of such norms is as under:

- i. No  insurer  shall  appropriate  or  write  back  any  part  of  the  Unclaimed  amounts belonging to the policyholders/ beneficiaries under any circumstances;
- ii. The   Policyholder Protection Committee of the Board of every insurer shall oversee the timely payout of the dues to policyholders;
- iii. The Audit Committee of the Board of every insurer shall oversee the compliance while examining the quarterly financial statements;
- iv. Every  Insurer  shall  display  the  information  about  any  unclaimed  amount  of  Rs. 1000/- or more on their respective web-sites;
- v. A facility shall be provided on the website of the insurer to enable Policyholders or beneficiaries  or  dependents  to  find  out  whether  any  unclaimed  amounts  due  to them are lying with the insurers;
- vi. All  insurers  shall  disclose  the  amount  representing  the  unclaimed  amounts  as  a separate line item in the specified Notes or Schedules to the Balance Sheet;
- vii. The above measures are in addition to the Senior Citizens' Welfare Rules which the  Government  has  notified  to  set  up  and  administer  Senior  Citizens'  Welfare Fund (SCWF), through the provisions of Finance Act, 2015 and Finance Act, 2016.
- viii. All unclaimed amounts held by the notified entities/ organizations shall be liable to be transferred after a period of 10 years from the due date, as defined under the provisions.  The  Rules  for  administration  and  utilization  of  the  SCWF  have  also been prescribed by the Central Government.