Unclaimed Deposits: Good News! A Step-by-Step Guide to Reclaim Long Lost Wealth, Check

Unclaimed Deposits: It is astounding to learn that as of March 2023, banks had ₹42,272 crore in unclaimed deposits, while mutual fund (MF) institutions had approximately ₹2,637.94 crore in unclaimed dividends and units. Dividends, debentures, and shares that have not been claimed for a minimum of seven years are deposited into the Investor Education and Protection Fund (IEPF), a repository established by the Companies Act of 1956. The RBI Depositor Education Awareness Fund (DEA Fund) receives deposits and interest from dormant bank accounts that have been unclaimed for more than ten years.

Unveiling the Astonishing Figures

We'll examine the primary reasons behind this startling figure in this post, along with strategies for people just like you and me to get through this confusion and retrieve our misplaced savings and deposits.

This enormous amount of unclaimed deposits and investments has several causes. When it comes to bank deposits, this is mostly because depositors fail to make redemption claims for matured fixed deposits or terminate savings or current accounts that they are no longer using. Furthermore, the legal heirs or nominees never come forward to assert a claim.

The Hesitation to Share Investment Details Within Indian Families

One of the primary causes, according to Share Samadhan co-founder Vikash Jain, is that Indian families don't discuss their financial information with one another.

“The first reason is investors often hesitate to share complete investment details with their families and in the case of emergencies, family members struggle to identify and retrieve investments. The second reason is people change their addresses without informing the relevant investment companies which leads to difficulties in communication and access to investments. The third reason is an alteration of maiden name after marriage, and the fourth reason is the loss of investment papers during natural disasters like floods or fires," said Vikash.

Exploring the UDGAM Portal for Identification

There are various methods for checking unclaimed deposits and investments, depending on the kind of investment.

“Unclaimed deposits with banks can be identified by going to the UDGAM portal launched by the RBI and filling necessary details of the accountholder. Similarly unclaimed shares and dividends can be searched for by going to the Investor Education and Protection Fund Authority’s (IEPF) website and putting in relevant details of the shareholder. However, there is no centralised portal or database whereby unclaimed insurance policy proceeds can be accessed. One has to go through individual websites of the insurance companies and check for unclaimed maturity proceeds," said Ankit Garg, Advocate and Founder of Garg Law Chambers (GLC).

The Key Components for Unclaimed Deposits and Investments Search

To search for information about unclaimed deposits or investments, investors or their legal heirs must know the relevant folio number, policy number, name, and address of the investor or deceased. “In most cases, the name, PAN Card and respective document of the unclaimed asset are needed to claim unclaimed assets," said Vijai Mantri, Co-founder of Jeevantika Consultancy Services.

Claiming Procedures Unveiled

According to Vijai, the procedure for claiming may vary depending on the asset, but the main goal is to verify the claimant's identity by providing KYC. It is also observed that children of the deceased find it difficult to ascertain the specifics of their parents' investments.

“The first thing that a person should do is to check the files and records at home. As Indians, we have the tendency to store important documents at home. And even if you think that a particular piece of paper is useless, you will be surprised to know that even an insignificant document can turn out to be very beneficial," said Vikash.

Unveiling Investment Details through Financial Advisors

In addition, he notes that while helping parents file their taxes, financial advisors and chartered accountants may have knowledge of investments. Examining bank statements for hints, such as premium payments or internet transactions pertaining to investments, is the third stage.

The last resort for those who have exhausted all other options is to go to the bank branch where they think their parents may have maintained accounts. “There might be a scenario where you believe that your parents had bank accounts among these four-five banks. You can walk up to them and say that you are a legal claimant and ask for any existing accounts of your parents with them," said Vikash.

Crafting a Formal Request to Companies

Once you have a good understanding of your parents' financial facts, you need to write to the companies and ask for specific steps.

“The legal heirs have to submit their KYC documents, death certificate of the deceased investor, and relationship proofs with the deceased such as Legal Heir Certificate, Family Tree, and Surviving Member Certificate. In case of high value shares or deposits, the concerned body may also ask the legal heirs to approach the court to obtain Succession Certificate or Probate in case the deceased left a Will. The process is simple in case there is a Nominee in the assets. In such a case, the nominee can get the investments faster by providing basic documents. However, it is important to note that the nominee is only a custodian of the investments. Legal heirs can stake claim on the said investments at any time, and their rights are protected under the law," said Ankit.

Tailoring Legal Documentation to Recovery Efforts

Furthermore, the specific legal documentation needed will vary based on the amount you are attempting to recover. “You have to provide the succession certificate beyond a certain claim amount. In case of physical shares, the limit was initially ₹2,00,000, but SEBI increased it to ₹5,00,000. However, if we're dealing with shares in demat form, that limit is ₹15 lakhs. Now, when it comes to banks, mutual funds and insurance policies, the threshold remains at ₹2 lakhs," said Vikash.

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