Indian banks told to be serious with unclaimed deposits

The Reserve Bank of India advised banks to implement more processes in dealing with unclaimed deposits.

The RBI feels that banks are not active enough in settling the unclaimed deposit accounts despite its repeated directives.

Among the processes includes putting in place a board approved policy on classification of unclaimed deposits, grievance redressal mechanism for quick resolution of complaints, record keeping, periodic review of such accounts, and to find the whereabouts of the customers and their legal heirs.

It has also directed banks to conduct the first periodic review of unclaimed deposits by September 30, 2012.

""Despite the instructions, banks have not been pro-active in tracing customers linked with unclaimed deposits/inoperative accounts,"" RBI said. "The need to identify the owners of these unclaimed deposits or inoperative accounts is closely linked to KYC (know your account) due diligence,"" it said.

It had earlier said that banks should review the inoperative accounts periodically and told them not levy any charge for activation of the accounts.

For more.