Unclaimed Money.

Unclaimed Money.


Billions of rupees are lying in foreign banks and in Indian banks as unclaimed.
They may be as unattended bank accounts or valuables in Safe Deposit Vaults.
They may be in the form of uncashed cheques or wages.
They may be as utility deposits escrow accounts.

Amounts invested with Post offices are lying as unclaimed saving accounts, all types of National Savings and small savings certificates, Indira bonds, Kisan Vikas bonds etc.

Unclaimed deposits lying with the Telephone department.

RBI has released the latest figures of unclaimed money lying with various banks in India and according to RBI as of December,09, Rs,.1,018 crore is lying in 1.3 crore accounts.
Though, this figure itself is pretty big but banks say that this amount could be even bigger this year because the claims on such deposits take a long time to settle.
Explaining the distribution of such funds RBI said that most of this money is lying in saving deposit accounts. More than 77.4 lakh accounts, which form a massive 75% of the entire accounts percent, have these funds. In terms of unclaimed money this segment accounts for Rs. 629.94 crore, which is over 60% of the total amount. Rs. 232 crore is lying unclaimed in 8.3 lakh fixed deposit accounts.
Around Rs 941 crore of this amount is held in public sector banks, which is over 90% of the total amount. Canara Bank, Punjab National Bank and State Bank of India corner more than one third of the entire unclaimed deposits among the public sector bank. Canara Bank topped the list with Rs. 178 crore, Punjab National Bank was second with Rs. 128 crore followed by the State Bank of India with Rs. 95 crore.
If any fixed deposit or saving account is not used for more than 10 years and lies unclaimed the funds are transferred from the concerned branch to the the bank's head office. RBI in a circular issued more than a decade ago had asked the banks to contact the customer, if it finds that the account is lying unused for over a year and if the customers do not respond efforts should be made to locate his recent address. However, most banks do not follow such practices.
In a similar looking measure RBI had recently asked the banks to refund the small credit balances to the customers and why do they mark a credit card account as closed in just six years. Small amounts left in the credit card accounts are written off to a suspense account and then transferred to a profit and loss account by the credit card companies. Though the amount is small in individual account but can become huge as the number of such account grows into millions.

British had a large presence in India, and ruled the country for centuries, which ended only with the country’s independence in 1947. Even then, for many English people the days of the Raj weren’t over, and they stayed on, some into the 1960s or even beyond, while others died there.
In some instances, they left money behind in accounts unclaimed, or if they died there, there might be money in bank accounts or possibly shares that no one has laid claim to.
The problem, of course, is locating the unclaimed assets.
Bank Accounts
The vast majority of unclaimed money in Indian bank accounts is actually in savings deposit accounts. In India an account is termed unclaimed if it’s had no activity in 10 years. However, even then accounts continue to earn interest of 3.5%. unless they’re unclaimed fixed deposit accounts, which no longer earn interest, since the deposit term has ended.
One of the biggest problems the banks have encountered has actually being getting people to claim old accounts, since the claim procedure, apart from being drawn-out and tedious, often proved to cost those who’d
Government on Monday said it has no plans to utilise unclaimed money of Employees Provident Fund Organisation, which has accumulated to the tune of Rs 3,837 crore, even as efforts are made to trace those who have not taken their dues.

"As the money, lying in the inoperative accounts belongs to the members or their heirs, and is payable at any time when claims are received, it cannot be utilised for any other purpose," Minister of State for Employment, said in the Lok Sabha.

He said that as of March 31, 2009, money to the tune of Rs 3,837 was lying unclaimed in the inoperative accounts of Employees Provident Fund.

In a written reply in the House he said instructions have been issued to all field officers to scrutinise the claims of the inoperative account holders and release the amounts only to the rightful claimants.

EPFO on its part is also making efforts to trace out the beneficiaries through advertisements in newspapers and inviting those who have not preferred their claims for more than three years after leaving their job.

The total membership of the provident fund organisation as on March 2009 was 4.49 crore and the Central Board of Trustees of EPF which met last week had recommended a rate of interest of 8.5 per cent on EPF deposited for 2009-10.
The SEBI has put in practice a mechanism to deal with large number of unclaimed
Shares. Changes in the listing agreement deal with unclaimed shares in public issues.
Such shares will now be credited to a demat account opened by the issuer with the depositor. The issuer will be supposed to send three reminders to the allotee who has not claimed the shares. In absence of any response, the shares will be transferred to demat a/c and its details will be kept. Dividends bonus shares and stock split if any would be credited to the same account. Verification wil be done of the allottee when he approaches the issuer.
The issuer will have to give details in their annual statement. Details such as total no. of unclaimed shares in demat a/c at the beginning and the end of the year. The report will also show that voting rights of the shares would remain frozen until claimed. Companies will have to make dividends on per share basis.