Unclaimed deposits in banks rise by 27% to Rs 14,578 crore in 2018

cash

Unclaimed deposits in the banking system have witnessed a jump of 26.8 percent to Rs 14,578 crore in 2018, Parliament was informed on July 1.

The unclaimed deposits rose to Rs 11,494 crore in 2017 from Rs 8,928 crore in 2016, Finance Minister Nirmala Sitharaman said in a written reply to the Lok Sabha.

State Bank of India (SBI) alone had an unclaimed deposit of Rs 2,156.33 crore at the end of 2018, she said.

With regard to the insurance sector, the minister said the life insurance sector reported unclaimed amounts of Rs 16,887.66 crore while non-life was Rs 989.62 crore at the end of September 2018.

“As far as unclaimed deposits in banks are concerned, in pursuance of the amendment to the Banking Regulation Act, 1949, and insertion of Section 26A in the said Act, RBI has framed the Depositor Education and Awareness Fund (DEAF) Scheme, 2014,” she said.

In terms of the scheme, banks calculate the cumulative balances in all accounts which are not operated upon for a period of 10 years or more (or any amount remaining unclaimed for 10 years or more) along with interest accrued and transfer such amounts to the DEAF, she said.

In case of demand from a customer whose unclaimed deposit had been transferred to the DEAF, she said banks are required to repay the customer, along with interest if any, and lodge a claim for refund from the DEAF.

The rate of interest payable on interest-bearing deposits transferred to the Fund was initially four percent per annum which has been changed to 3.5 percent a year with effect from July 1, 2018.

The DEAF is 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 the Reserve Bank of India (RBI), she added.

With regard to unclaimed amounts in insurance companies are concerned, the minister entities having unclaimed amounts for more than 10 years are required to transfer the amounts to the Senior Citizens’ Welfare Fund (SCWF) on or before March 1 every year.

“The SCWF is utilised for schemes for promoting the welfare of senior citizens. If a claim is made, insurers are required to pay the identified unclaimed amount along with the investment income so credited to the policyholders or beneficiaries, as per the procedure,” she said.

In reply to another question, Sitharaman said the number of fraud incidence in public sector banks have declined to 739 in 2018-19 as compared to 1,545 in the previous financial year.

An aggregate amount of Rs 2,06,586 crore has been recovered by public sector banks from non-performing asset (NPA) accounts during the last five financial years as a consequence of legal actions initiated by them, she said.

Replying to another question, the minister said as many as 11,816 incidence of cash siphoning from ATMs were reported from various parts of the country in the last two financial years.

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