Policy on Unclaimed Deposits (2018-19)
1. Preamble
One of the important functions of the bank is to accept deposits from the public. But it so
happens that some of the accounts are not operated upon by the customers for quite a long period
under circumstantial compulsions and they become oblivious of their deposits. Accounts not
operated upon by the customers for considerable time are termed as inoperative/dormant
accounts and have inherent risk associated with them. Further, it poses difficulties to the
customers and/or to their kin in tracing the account and in making it operative.
This policy document on unclaimed deposits outlines the guiding principles in respect of
formulation of various safeguards and obligations on the part of the bank to fulfill its
commitments towards the customers and recognizing the rights of the customers.
2. Classification of In-operative accounts:
All accounts (Savings Bank and Current) which are not operated upon for a continuous period of
over 2 years shall be treated as inoperative (dormant) accounts.
In case of term deposits the 2 year period shall be reckoned after the date of maturity.
For the purpose of classifying an account as ‘inoperative’ both the type of transactions i.e.
“debit” as well as “credit” transactions induced including standing instructions at the instance of
customers as well as third party shall be considered. However, the service charges levied by the
bank or interest credited by the bank shall not be considered.
3. Transactions/Mode of Operations considered to Keep an
account as Operative:
A savings as well as current account should be treated as inoperative / dormant if there are no
transactions (i.e. no credit or debit other than crediting of periodic interest or debiting of service
charges) in the account for over a period of two years.
There may be instances where the Customer has given a mandate for crediting the interest on
Fixed Deposit account to the Saving Bank account and there are no other operations in the
Saving Bank account. Since the interest on Fixed Deposit account is credited to the Saving Bank
account as per mandate of the customer, the same should be treated as operative account as long
as the interest on fixed deposit account is credited to the Saving Bank account. The Saving Bank
account can be treated as inoperative account only after two years from the date of the last credit
entry of the interest on Fixed Deposit account and if there are no other operations in the account
during the period.
4. Review of accounts not operated for more than One year:
In view of the increase in the amount of the unclaimed deposits with banks year after year and
the inherent risk associated with such deposits, banks should play a more pro-active role in
finding the whereabouts of the account holders whose accounts have remained inoperative.
Bank shall make an annual review of accounts in which there are no operations (i.e. no credit or
debit other than crediting of periodic interest or debiting of service charges) for more than one
year. The bank shall make an endeavor to approach the customers by informing them in writing
that there has been no operation in their accounts and ascertain the reasons for the same. In case
the non-operation in the account is due to shifting of the customers from the locality, they may
be advised to provide the details of the new bank accounts to which the balance in the existing
account could be transferred.
If the letters are returned undelivered, the customers shall immediately be put on enquiry to find
out their whereabouts or their legal heirs in case they are deceased.
In case the whereabouts of the customers are not traceable, banks shall consider contacting the
persons who had introduced him/her to the bank. Bank may also consider contacting the
employer/or any other person whose details are available with bank’s record. In case the
customer has furnished his telephone number, the same may be used for contacting him. In case
of Non Resident accounts, the bank may also contact the account holders through email and
obtain their confirmation of the details of the account.
In case any reply is received from the account holder giving the reasons for not operating the
account, bank may continue classifying the same as an operative account for one more year
within which period the account holder shall be requested to operate the account. However, in
case the account holder still does not operate the same during the extended period, bank shall
classify the same as inoperative account after the expiry of the extended period.
5. Prior notice on classification of the account as In-
Operative:
The account holders to be advised, by sending SMS, e-mails, intimation letters that their account
is liable to be classified as dormant after a period of in-operation of 1 year and 9 months. i.e.
three months before the account is classified as dormant / inoperative and requesting them to put
through a transaction (credit or debit) to keep the account active. The letter to respective account
holder will be sent by post. In case of joint account holders, we send intimation letter to all joint
holders individually.
6. Allowing operation in In-operative accounts:
The account holder should submit a letter to the Bank in person, along with the pass book for
Savings Bank / Cheque book for current account, with the request to change the status of the
account from “ Dormant to Active’ indicating the reasons for not operating the account in the
past. The account holder should also submit the following documents / records to the Bank for
verification.
Recent color passport size photo
Certified copy of officially valid documents for proof of identity.
Certified copy of officially valid documents for proof of address.
Due diligence in allowing operations in Inoperative Accounts:
In order to reduce the risk of fraud etc., while allowing operations in these accounts, due
diligence should be exercised by ensuring the genuineness of transactions, verification of
signature and identity, etc. However, it has to be ensured that the customer is not put into
inconvenienced in any manner
Segregation of the In-operative accounts:-
The segregation of the inoperative accounts from the operative accounts is from the point of
view of reducing risk of frauds etc. in such accounts. However, all efforts shall be made to
ensure that the customer does not get inconvenienced in any way, just because his/her account
has been rendered inoperative. The transaction shall be monitored at a higher level both from the
point of view of preventing fraud and making a Suspicious Transaction Report after assessment.
However, the entire process to remain unnoticeable by the customer
7. Depositor Education and Awareness Fund (DEAF):
In terms of announcement of Monetary Policy 2013-14 and pursuant to the enactment of the
Banking Laws (Amendment) Act, 2012, Section 26A has been inserted in the Banking
Regulation Act, 1949, which inter alia, empowered RBI to establish a Depositor Education and
Awareness Fund (DEAF). Accordingly the DEAF Scheme, 2014 has been made operational. In
terms of RBI guidelines, amounts outstanding in the following accounts remaining inoperative
for 10 years and above are to be transferred to DEAF A/c of RBI along with interest wherever
applicable.
Interest bearing Deposit A/cs,
Non-Interest bearing Deposit accounts, and
Other Credit Items.
8. Payment of Interest to the Depositors/Claimants on the
interest bearing unclaimed deposits transferred to RBI
DEAF account:
In respect of unclaimed amount transferred to the Depositor Education and Awareness Fund
(DEAF), we shall be liable to repay a depositor or any other claimant, claiming his deposit or
unclaimed amount, at such rate of interest as may be specified by the Reserve Bank of India in
this behalf. Where we have paid such amount or allowed operation of such account or deposit,
we will apply for refund of such amount from the DEAF fund. Reserve Bank of India specifies
that the rate of interest payable by us to the depositors/ claimants on the unclaimed interest
bearing deposit amount (SB and Term Deposit) transferred to the DEAF fund shall be 3.5 %
simple interest per annum, w.e.f 01.07.2018. The settlement of all claims received by the
branches on or after 01.07.2018 will be 3.5% simple interest rate p.a.
The amount of interest payable be made rounding off the amount of interest to the nearest Rupee.
The interest payable from the Fund on a claim shall accrue only from the date on which the
balance in an account was transferred to the Fund to the date of payment to the customer/
depositor.
9. Unclaimed deposits/ inoperative accounts operational
guidelines and follow up:
There shall not be any charge for activation of inoperative account.
Amounts lying in inoperative accounts shall be properly audited by the internal
auditors/statutory auditors of the bank.
Interest on savings bank accounts shall be credited on regular basis whether the account
is operative or not. If a Fixed Deposit Receipt matures and proceeds remain unpaid, the
amount left unclaimed with the bank will attract savings bank rate of interest.
Bank shall display the name and address of account holders of unclaimed deposit
accounts, which are inactive / inoperative for ten years or more on its Web-site preferably
with FIND option. In case such accounts are not in the name of individuals, the name of
individuals authorized to operate the accounts should be indicated.
Bank shall also display on the website, the information on the process of claiming the
unclaimed deposit/activating the inoperative account and necessary forms and documents
for claiming the same.
Bank may also consider launching a special drive for finding the whereabouts of the
customers/legal heirs in respect of existing accounts which have already been transferred
to the separate account head ‘inoperative accounts’.
10. No Minimum Balance and Incidental Charges for
Inoperative Accounts:
No charges are to be levied in inoperative accounts i.e. no charges for non-maintenance of
minimum balance are to be levied in inoperative accounts and also, Incidental charges will not be
levied once the account becomes inoperative after two years of no-operation in the account
11. Direct Benefit Transfer/Electronic Benefit
Transfer/Scholarships for students etc.:-
For crediting cheques/Direct Benefit Transfer/Electronic Benefit Transfer/Scholarships for
students etc., into accounts / Accounts with zero balance opened for the beneficiaries under
various Central/State Government schemes such accounts are not to be classified as
dormant/inoperative due to non-operation of the account for over two years.
12. Reporting to RBI:
Section 26 of the Banking Regulation Act, 1949 provides, inter alia, that every banking company
shall, within 30 days after close of each calendar year submit a return in the prescribed form and
manner to the Reserve Bank of India as at the end of each calendar year (i.e., 31st December) of
all accounts in India which have not been operated upon for 10 years.
13. Preservation of records:
Branches are to take steps for preserving the customer account information including
preservation of records pertaining to the identification of the customers and their addresses
obtained while opening the account, for at least five years after the business relationship is
ended.
14. Mandate of customers to credit dividend on shares:
Where a customer has given a mandate for crediting dividend on shares to SB account and there
are no other operations in the account, such account to be treated as an operative account as long
as the dividend is credited to the Savings Bank account. The Savings Bank account can be
treated as inoperative account only after two years from the date of the last credit entry of the
dividend, provided there is no other customer induced transaction.
15. Mandate of customers to credit dividend on shares:
MD & CEO /Executive Director are authorized to issue clarifications on all operational matters
relating to this Policy.
Note: Regulatory changes as per RBI notification will form part of Policy.
