What to do with your unclaimed crores?

When the RBI recently issued a circular Number RBI/2021-22/37 DoR.DEA.REC.No.16/30.01.002/2021-22 directing all the banks to continue paying interest to depositors on the unclaimed interest-bearing deposit accounts, it raised the lid off thousands of crore lying unclaimed and transferred to the RBI’s DEA Fund. A whopping  82,025 crore estimated investor wealth is idling in unclaimed accounts and that makes a strong case that one should share information about investment with the family members.

According to the RBI regulations, if a bank account remains inoperative for a period of 10 years, the money can be transferred to DEAF. Pursuant to The Banking Laws (Amendment) Act, 2012, Section 26A had been inserted in the Banking Regulation Act, 1949. The Section empowers the Reserve Bank to establish a fund called Depositor Education and Awareness Fund (DEA Fund), writes BHARAT HITESHI

Life is full of uncertainties, and misfortune can strike anytime.  The recent coronavirus pandemic showed how unpredictable life had become. Although you cannot predict bad times, you can still take certain steps that can help your near ones deal with this tough situation.

Sharing your investment details with your spouse is one such step as it will ensure that there is always someone to take appropriate and suitable decisions in order to make the best use of the investments done by you in the unfortunate event of your death.

In fact when the Chief General Manager of the RBI, Thomas Mathew sent a circular to all banks on May 11, 2021, he advised the banks to calculate the interest payable on interest bearing deposits transferred to RBI at the rate of 4 per cent per annum up to June 30, 2018, 3.5 per cent from July 1, 2018 up to May 10, 2021 and at 3 per cent with effect from May 11, 2021 till the time of payment to the claimant.

However, according to the RBI’s own data, the number of accounts under the unclaimed deposits category had risen year after year and so had been the outstanding amount. The unclaimed amount increased by about 28 per cent year on year on a yearly basis to 18,379.52 crore from 4,307.19 crore till the previous year.  The RBI data shows that the unclaimed deposits had increased by about 34 per cent year-on-year to 6.41 crore as of December-end 2019 (4.79 crore as of December-end 2018).

Significantly, from our daily routines to other important decisions in life we share everything with our families. We take their views on matters such as when we should plan the monthly shopping trip or which should be our next holiday destination. However, most people avoid involving their family in one of the most crucial aspects of their lives — ‘Finances’; and even if they do involve, they do not discuss in much depth.

Discussing financial affairs and decisions with family members are often regarded as unimportant and unnecessary. The following points will help you recognize the need of discussing your financial affairs with your loved ones:

Involving your spouse in financial planning:

In our country, most financial decisions are taken by the bread earner or the head of the family. In this process, the views of the spouse (usually the wife) are generally not taken into consideration. This may be because the spouse lacks financial knowledge or interest in the financial affairs of the family. However, as irrelevant as this may sound to you, it is extremely important to include your better half while planning or reviewing your financial plans. You might be surprised at the inputs your spouse can

provide while planning your finances. The final goals of you and your spouse may remain the same such as educating and getting your children settled, saving for your retirement, medical emergencies and so on.

Sharing investment details readily gives access to your spouse about information regarding what, how much and where all the family investments are. This makes sure that the spouse remains aware about supporting documents or statements in order to ascertain the investment corpus in your absence. Having access to investment details, the spouse would not have to borrow money from others. By sharing details, your family does not miss out on any benefits of the investments. Since your spouse has access to the investment details in full, in times of crisis (in case of your death), a decision on investment redemption can be taken on priority. This makes the redemption process relatively easier and, needless to say, faster, as well.

Handling Medical Emergencies Smoothly In times of medical emergencies leading to admission in hospitals, your spouse is in a better and commanding position to take care of all the required paperwork when it comes to dealing with the medical insurance company. In case you don’t have a medical insurance policy, your spouse can readily decide which investments to touch in order to address the immediate financial requirement adequately.


Nomination is a process where you nominate an individual (usually a family member) to rightfully claim your assets in your absence. Appointing a nominee for all your assets will reduce the hassles faced by your family in case of your death.

It is imperative that your spouse knows about all your bank accounts, investments (both financial and physical) and liabilities. This will ensure that she never faces helplessness and is never misled by any of your debtors or creditors in your absence.

This will help your family in easily procuring the money when they need it the most. It is also important to make your children aware of the family’s

assets and the procedure to claim the money in case something happens to both the parents.

Financial Security And Stability

In case of your demise, a claim process has to be initiated under the term insurance policy. Sharing details of your term insurance with your spouse helps your dependent family get a strong cover of financial security soon without delay. Apart from this, your spouse will be equipped well to transfer your investments in her/his name in order to use the proceeds in the future. Further, your partner will be in a better position to manage the investment portfolio going forward bringing in overall financial stability in the family.

Creating awareness among children:

Many of you may have experienced that today’s generation is very smart and are fast learners due to their inquisitive acumen. Schools today are also training children about personal finances, but having said that it is imperative to involve your children while taking financial decisions for the family, especially the ones that will affect them, and infuse in them the value of money no matter what your economic status is.  It is imperative to involve the child while creating a financial plan for the said goal. Discussions like these will create curiosity in their mind and help them understand the family’s financial situation. As parents, the earlier you create financial awareness among your children, the lesser mistakes they would make as they grow up.

Children’s Future

Children are any family’s biggest asset. In absence of anyone parent, the dreams that you both had seen together for your children run the risk of derailing if there is no adequate financial security. Since the surviving spouse understands the importance and knows the family investments, s/he feels empowered and stays committed for a successful future of children by way of better utilisation of the available resources.

Financial Independence:

Although involving the family members in handling all the day-to-day finances may not be necessary, it would be prudent to discuss with them the monthly budgets and expenses. You must give your spouse and kids an opportunity to handle some of their personal and household expenses.

For instance, let your spouse pay certain monthly expenses if he or she is not already doing so. This will create a feeling of being involved and the ability to contribute to the financial affairs of the family and also help them to become financially independent in the long term. Also most teenagers use mobile phones. Give them a budget for the usage and let them pay for their own expenses from their pocket money. This will help them to appreciate the importance of financial planning and budgeting.

Team Effort:

It takes discipline and efforts from all the family members to ensure that the financial goals of the family are fulfilled. You must ensure that you have a meeting with your spouse and children to determine the monthly budget and review the expenses. Only if all the members of the family mutually take efforts to curbing unnecessary expenses and work towards a common goal, can the financial objectives of the family be met. Without teamwork between members, all these wishes and dreams might never come true.


◆18381 crore lying in unclaimed bank accounts.

◆15167 crore lying unclaimed with insurance companies.

◆17880 crore lying in inactive mutual fund folios.

◆4100 crore of unclaimed dividend lying in IEPF.

◆26497 crore is lying unclaimed in provident fund accounts.

◆Keep family informed about finances

◆Always have a nominee

◆Write a Will

◆Keep updating details, whenever there is a change.

◆Keep your deposit in one branch. If you keep in many branches of multiple banks, your are making way for unclaimed deposit.

◆Keep your trading and demat accounts with 1 or 2 brokers. Finally shift to one. Do visit your brokers office , bank branch and maintain relationship. In case of eventuality, they will inform your family.

◆Pay a small fee and remain with your advisor. Even if you forget, all your investment information will be with the advisor. He will pass on to your family.


THE IMPORTANT THING TO DRAW is that discussing money matters with family is not a taboo topic. If you have not yet disclosed, then it is high time you started sharing all financial issues with your family before it’s too late and discuss it rationally with maturity. In a recorded case, when a flagship equity scheme completed 25 years, a Fund house wrote to investors who had remained invested in the scheme for more than two decades. But the note of congratulation led to a completely unexpected outcome. Over the next few weeks, there was a perplexing flurry of redemption requests from many long-time investors.

It is a known fact that bank fixed deposit, PPF, EPF and mutual funds, among others, are some of the most popular saving and investment schemes in India. Even though investments in mutual funds have increased in the last few years, some of the other investment schemes have been popular since some time now. Investors have been investing in these schemes for a long time, and many account holders also hold multiple accounts in these investments avenues.

However, due to long investment tenures, or/and having multiple accounts, many people forget about their savings and investments. Even though the institutions holding the money have to get in touch with the account holder after a certain period, most claim that they are unable to contact or get in touch with many customers as their address and contact details have changed over the years and are not updated with the institution.

This unclaimed money is moved to a different government fund after a certain period of time. Account-holders and policyholders can claim their money directly from these funds. For instance, unclaimed money from bank fixed deposits is moved to the Depositor Education and Awareness Fund (DEAF), unclaimed insurance, PPF and EPF money is moved to the Senior Citizen’s Welfare Fund (SCWF), and unclaimed money from mutual funds and stocks is moved to the Investor Education and Protection Fund (IEPF).  DEAF consists of bank deposits that have remained unclaimed for 10 years. It was formed in 2014, and the unclaimed money from any bank account that has not been in operation for the past 10 years or more, is transferred to this fund within 3 months from the expiry of 10 years.  The DEAF scheme utilizes these funds to support the depositors’ interests and their awareness.

Investors can claim their money even after the expiry of 10 years. They can also claim the amount after it has been transferred to the DEAF account. In this case, the bank will pay the account holder the money, which will be refunded by the DEAF to the bank.

Then there is the Senior Citizen’s Welfare Fund. The SCW fund holds unclaimed deposits from PPF, post office savings accounts, EPF, RD accounts and similar other accounts. This Welfare Fund was formed in 2015 to utilize unclaimed funds lying idle for a productive cause and in general welfare of the society. In case of insurance money, for instance, if the money stays unclaimed at the end of 10 years from the due date, it is then transferred to the senior citizen welfare fund.