Indian banks have $446M of unclaimed deposits

The Indian government wants unclaimed funds amounting to US$446,825,738 from Indian banks of more than 10 years be credited to a new fund.

The Banking Laws (Amendment) Bill, 2011, has been introduced in the Lok Sabha, wherein a new section relatingto formation of a 'Depositor Education and Awareness Fund' has been inserted.

"It is proposed that the deposit accounts with banks, which have not been operated upon for a period of more than 10 years, will be credited to this Fund within three months from the expiry of the said period of ten years," said Minister of State for Finance Namo Narain Meena.

The Reserve Bank of India has informed that as of December 31, 2011, total amount of around Rs 2,481.40 crore or US$446,825,738 in 1,12,49,844 accounts is lying as unclaimed deposits with the commercial banks, according to Meena.

The minister said total amount of unclaimed deposits remains with respective banks, which deploy the same for their general business, like any other deposits.

The Fund is proposed to be utilised for promotion of depositors' interest and for such other purposes, as may be specified by the RBI from time to time.

"However, a depositor or any other claimant could claim his deposit or unclaimed amount or operate his deposit account from or with the bank after the expiry of said period of ten years."

He further said such banks shall be liable to repay such deposit or amount at such rate of interest as may be specified by RBI in this behalf.

The bank would claim refund of such amount from the authority or the committee constituted by RBI to administer the Fund.

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