Lok Sabha Question No. 3836 (UNSTARRED), answered on 2017-03-24
Subject: Unclaimed Deposits in Banks and Insurance Companies
Ministry: FINANCE
Asked by: DODDAALAHALLI KEMPEGOWDA SURESH, B.N. CHANDRAPPA, KIRIT SOMAIYA

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO. 3836 TO BE ANSWERED ON FRIDAY, MARCH 24, 2017/CHAITRA 3, 1939 (SAKA) UNCLAIMED DEPOSITS IN BANKS AND INSURANCE COMPANIES

3836. SHRI D.K. SURESH: SHRI B.N. CHANDRAPPA: DR. KIRIT SOMAIYA:

Will the Minister of FINANCE be pleased to state:

- (a) whether  there  is  huge  unclaimed  deposits  in  various  banks  and  insurance companies in the country and if so, the details thereof during the last three years and the current year, bank and insurance, company-wise;
- (b) whether the Government has any norms to deal with such unclaimed deposits in banks and insurance companies and if so, the details thereof; and
- (c) whether the Government has any proposal to utilise such unclaimed deposits for the welfare activities of socially disadvantaged groups in the country and if so, the details thereof?

## ANSWER THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SANTOSH KUMAR GANGWAR)

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

| As of      |   Unclaimed Deposits (Rs. in crores) |
|------------|--------------------------------------|
| 31.12.2013 |                              5124.98 |
| 31.12.2014 |                              4998.27 |
| 31.12.2015 |                              6835.4  |

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

| As of      | Unclaimed Deposits (Rs. in crores)   | Unclaimed Deposits (Rs. in crores)   |
|------------|--------------------------------------|--------------------------------------|
|            | Life Insurers                        | Non-Life Insurers                    |
| 31.03.2014 | 6335.25                              | 900.00                               |
| 31.03.2015 | 5439.97                              | 1787.26                              |
| 31.03.2016 | 10527.17                             | 1198.28                              |

(b)  and  (c): Section  26A  of  the  BR  Act,  1949,  empowers  the  Reserve  Bank  of  India (RBI) to establish   'The Depositor Education and Awareness Fund' (the 'Fund'). Under the provisions of this section 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, however, is entitled to claim from the bank his deposit or unclaimed amount or operate his 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'. In terms of para 9 of the Depositor Education and Awareness Fund Scheme, the 'Fund' shall be utilised for  promotion  of  depositors'  interests  and  for  such  other  purposes  which  may  be necessary for promotion of depositors' interest as may be specified by RBI.

The Limitation Act, 1963 provides a time limit of 3 years for claim due to a policyholder under an Insurance Policy. Insurance Regulatory and Development of India (IRDAI) has also  issued  directions  in  this  regard  to  all  insurers  to  bring  better  governance, transparency and smooth transfer of the amount due to the policy holder. The directions of IRDAI cover the entire gamut of unclaimed amount including any amount payable to policyholder  as  death  claim,  maturity  claim,  survival  benefit,  premium  due  for  refund, premium deposit not adjusted against premium and indemnity claims etc. which have remained unclaimed beyond six months from the due date for settlement of the claimed amount. The direction of IRDAI, inter-alia, includes the following:

- (i) All  insurers  are  required  to  display  the  information  about  any  unclaimed  amount above Rupees 1000/- of Policyholders in their respective web-site.
- (ii) A facility shall be given in the web-site of the insurer to enable Policyholders / or its dependents to find out whether any unclaimed amounts due to them are lying with the insurer.
- (iii) In  order  to  minimize  the  unclaimed  amount,  insurers  shall  endeavor  to  keep  the Policyholder  and  beneficiary  informed  about  any  updates,  changes  and  maturity details  by  SMS  alerts  or  e-mail  or  any  other  mode  as  may  be  specified  by  the Authority on regular basis.
- (iv) There  may  be  instances  where  insurers  have  issued  cheques  against  the outstanding unclaimed amounts but some of these cheques may have not been encashed by the policyholders. In such cases, after the expiry of the validity period of the cheques, the same shall be credited back to unclaimed amount.