SC notice to Centre on plea to make unclaimed deposits available to legal heirs

The petition also raised the need for a centralised database governed by RBI with basic details of deceased bank account holders

The Supreme Court Friday issued a notice to the Centre on a plea by journalist Sucheta Dalal for creating a mechanism to ensure the availability of over Rs 40,000 crore in unclaimed money of deceased investors, depositors and account holders to their rightful legal heirs.

A bench of Justices Abdul Nazeer and J K Maheshwari sought a response from the Union government, RBI and others, saying the issue is an important one.

The petition filed by advocate Prashant Bhushan also raised issues pertaining to the need for a centralised data website governed by RBI that would provide basic details of deceased bank account holders and the need to make the process of claiming funds in dormant/inoperative accounts by legal heirs/nominees hassle-free.

The plea sought directions to ensure that unclaimed funds of the public that get transferred to government-owned funds viz the Depositor’s Education and Awareness Fund (DEAF), Investor’s Education and Protection Fund (IEPF) and Senior Citizen’s Welfare Fund (SCWF) on the ground that the same were not claimed by the legal heirs/nominees, are made available to said legal heirs/nominees by providing information of holders of inoperative/ dormant accounts on a centralized online database.

“The Depositors’ Education and Awareness Fund (DEAF) had Rs 39,264.25 crore at the end of March 2021, up from Rs 33,114 crore on March 31, 2020 and a sharp rise from Rs 18,381 crore at the end of March 2019. Further, the amount lying with the IEPF, started at Rs 400 crore in 1999, was 10 times higher at Rs 4,100 crore at the end of March 2020,” the plea said.

The plea also contended that the information of deceased investors whose deposits, debentures, dividends, insurance and post office funds etc, have been transferred to the IEPF, is not readily available on its website.

“The IEPF authority publishes the name of the people whose money has been transferred to the fund on its website. However, several technical glitches are encountered when the website is accessed. Resultantly, people are forced to engage middlemen and pay 20-50% to agents to get their refunds," it added.