In the bank if the money is lying in accounts which has been inactive for over 10 years it is termed as unclaimed deposits. At present more than Rs 1,000 cr is lying unclaimed with banks in India in 1.03cr inactive accounts.
According to the latest figures as of December ’06, released by the Reserve Bank of India, Rs 1,018.8 crore is lying unclaimed in 1.03crore accounts with all bank groups. Bankers claim that the amount could be even higher this year as claims on such deposits hardly ever get settled in a short period.
It’s amazing that a big amount of money is lying in savings deposit accounts. It accounts for more than 75% (77.4 lakh) of the number of accounts and over 60% (Rs 629.94cr) in terms of value of unclaimed money. The build up interest on these deposits is Rs11.5crore. In fixed deposit the unclaimed amount is around Rs232 crore in 8.3lakh accounts.
Alone Public sector banks accounts for more than 90% ( Rs 941crore) of such deposits. Canara Bank with (Rs 178crore) is at the top of the list with accounting for more than a third of unclaimed deposits among public sector banks, followed by Punjab National Bank (Rs 128 crore) and State Bank of India (Rs 95 crore).
If the money is left unclaimed in the fixed deposits for more than 10 years or if money in savings account and current account is left unutilized for the same period of time then the money is transferred to the banks head office from a branch office.
The Reserve Bank yet, does not have any clear accounting policy on such deposits; they are shown as current and contingencies in their balance sheets. These resources prove to be useful at times of a boom in long-term credit demand. But, at the same time attract a cash reserve requirements (CRR) — parking a stipulated portion of bank deposits with the central bank — and entails an outgo when CRR is hiked.
According to the sources a decade ago RBI has issued a circular to the banks in which the central bank has asked the banks try to get in touch with the customer if an account is not operated for over a year. If in any case account holders fail to respond or communications bounces back, efforts should be made to locate the new address.
Only after 10 years, the account is not operated then only an account is classified unclaimed. According to the Bankers much of the money lying in unclaimed accounts is by individuals or Hindu Undivided Family accounts. It is in rare cases that the accounts own by businesses, corporates and trusts go unclaimed in time, they add. This is largely because may of these accounts belong to individuals who have been deceased without leaving a will.
At times the legal heirs are not aware about the accounts owned by their predecessors and often come to light many years later. Hence the things are, changing slowly with banks making nomination almost compulsory at the time of opening an account.