Unclaimed Deposits Transfer: Public sector banks transfer ₹35,012 cr unclaimed deposits to RBI
As of February 2023, public sector banks (PSBs) in India have transferred unclaimed deposits worth ₹35,012 crore ($4.7 billion) to the Reserve Bank of India (RBI), according to a report by the central bank. The transfer of these funds was made under the Banking Regulation Act, 1949, which mandates banks to transfer unclaimed deposits to the Depositor Education and Awareness Fund (DEAF), managed by the RBI. The funds in the DEAF are used for promoting depositors’ interests and for creating awareness about deposit insurance among the public.
The amount of unclaimed deposits transferred to the RBI has increased from ₹22,223 crore ($3 billion) as of March 2020 to ₹35,012 crore as of February 2023, indicating an increase in the number of unclaimed deposits. Among the PSBs, State Bank of India (SBI) accounted for the highest amount of unclaimed deposits transferred to the RBI, with a sum of ₹17,487 crore.
Why this News is important:
The transfer of unclaimed deposits to the RBI by PSBs is an important development as it ensures that these funds are not lost or forgotten, but are used for the benefit of depositors. The Banking Regulation Act, 1949, was enacted to safeguard the interests of depositors and ensure the stability of the banking system. The transfer of unclaimed deposits to the DEAF is a step towards achieving this objective.
Historical context:
The transfer of unclaimed deposits to the RBI is not a new development. The Banking Regulation Act, 1949, mandates banks to transfer unclaimed deposits to the DEAF. The DEAF was established in 2014 with the objective of promoting depositors’ interests and creating awareness about deposit insurance among the public. The DEAF is managed by the RBI, and the funds in the DEAF are used for various purposes such as payment of claims to depositors, promotion of depositors’ interests, and creating awareness about deposit insurance among the public.
Key Takeaways from “Public sector banks transfer ₹35,012 cr unclaimed deposits to RBI”:
| Serial Number | Key Takeaway |
|---|---|
| 1. | PSBs in India have transferred unclaimed deposits worth ₹35,012 crore ($4.7 billion) to the RBI as of February 2023. |
| 2. | The transfer of unclaimed deposits to the DEAF by PSBs ensures that these funds are not lost or forgotten, but are used for the benefit of depositors. |
| 3. | The Banking Regulation Act, 1949, mandates banks to transfer unclaimed deposits to the DEAF. |
| 4. | The DEAF was established in 2014 with the objective of promoting depositors’ interests and creating awareness about deposit insurance among the public. |
| 5. | Among the PSBs, SBI accounted for the highest amount of unclaimed deposits transferred to the RBI, with a sum of ₹17,487 crore. |
Important FAQs for Students from this News
Q: What are unclaimed deposits?
A: Unclaimed deposits are deposits that are not claimed by the account holder or their legal heirs for a specific period of time.
Q: What happens to unclaimed deposits in banks?
A: As per the Banking Regulation Act, 1949, banks are required to transfer unclaimed deposits to the Depositor Education and Awareness Fund (DEAF), which is managed by the Reserve Bank of India (RBI). The funds in the DEAF are used for promoting depositors’ interests and creating awareness about deposit insurance among the public.
Q: How long does it take for a deposit to become unclaimed?
A: The time period after which a deposit becomes unclaimed varies from bank to bank. Typically, it ranges from one to three years.
Q: Can unclaimed deposits be claimed by the account holder or their legal heirs later?
A: Yes, unclaimed deposits can be claimed by the account holder or their legal heirs even after they have been transferred to the DEAF. However, the process of claiming these deposits is more complex and time-consuming than claiming active deposits.
Q: Which bank accounted for the highest amount of unclaimed deposits transferred to the RBI?
A: State Bank of India (SBI) accounted for the highest amount of unclaimed deposits transferred to the RBI, with a sum of ₹17,487 crore.
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