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FM Sitharaman Emphasises Speedy Refund of Unclaimed Funds
Moneylife Digital Team 11 June 2025
Economy & Nation
Union finance minister (FM) Nirmala Sitharaman, while chairing the 29th Financial Stability and Development Council (FSDC) meeting in Mumbai on 10 June 2025, urged regulators and departments to accelerate the process of returning unclaimed financial assets to their rightful owners through coordinated district level camps.
 
“Interest of common citizens must be kept in mind,” she declared, urging regulators and departments to expedite refunds through coordinated multi agency district level camps involving the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), ministry of corporate affairs (MCA), pension fund regulatory and development authority (PFRDA), insurance regulatory and development authority (IRDAI), banks, pension agencies and insurance companies.
 
In the same breath, the FM underscored the importance of simplifying and digitalising the know-your-customer (KYC) process across the entire financial sector. She called on regulators to prescribe common KYC norms and enhance digital onboarding—especially for non-resident Indians (NRIs), persons of Indian origin (PIOs) and overseas citizens of India (OCIs) participating in the Indian securities market—to ensure that every citizen experiences a seamless interface, whether claiming unclaimed funds or opening a new account.
 
Beyond these headline announcements, FM Sitharaman outlined an ambitious agenda to strengthen financial resilience. FSDC discussed reducing regulatory lag, expanding factoring services, boosting account-aggregator networks and shoring up cyber resilience—drawing from the financial sector assessment programme (FSAP 2024-25). Central to these efforts is the shared goal of improving responsiveness within the financial sector and improving inter-regulatory coordination for wider, more inclusive development.
 
Key to the FM’s push is tackling the vast reservoir of unclaimed assets across India. RBI data shows that unclaimed bank deposits had surged to around Rs78,213 crore by March 2024—transferred to the depositor education and awareness fund (DEAF), a 26 percent increase from the prior year. Separately, the investor education and protection fund (IEPF) held Rs,714 crore in corporate benefits as of July 2023, with an estimated Rs82,199 crore in unclaimed shares and dividends. When other categories—like insurance, provident funds, mutual funds, post-office savings and dormant deposits—are added, Moneylife Foundation estimates the total unclaimed assets in India exceed Rs2 lakh crore. 
 
In August 2024, the Foundation has released a report showing how fragmented systems, inconsistent KYC norms, poor nomination processes, weak searchability and lack of awareness are causing a crisis, particularly for legal heirs. The report pressed for a central unclaimed funds authority, interoperable KYC across sector regulator, unified standard operating procedures (SOPs) and robust mechanisms for reporting and registering deaths.
 
FM Sitharaman’s call for streamlined KYC processes and district-level camps appears to be a clear policy direction that addresses the very obstacles Moneylife has consistently identified and advocated for.
 
The ministry of finance’s push also comes on the back of tangible action driven by public interest. In 2022, Sucheta Dalal, managing editor of Moneylife and founder-trustee of Moneylife Foundation, had filed a Public Interest Litigation (PIL) highlighting the growing problem of unclaimed assets and the systemic barriers to claiming them (Read: SC Issues Notice on Plea By Sucheta Dalal That Information on Unclaimed Amounts Lying in Dormant Accounts Be Made Publicly Available on a Centralised Platform). Following this and sustained engagement, RBI launched the UDGAM portal in August 2023 to help individuals trace unclaimed deposits across multiple banks—though the initiative remains limited in scope and usability.
 
Comments
r_ashok41
1 month ago
our FM dept talks of big things but ground realities are not a single bank or financial institution to put into extra effort to find out whether the person is alive or not and then who is the next kin of the person .When one goes to the bank itself they do not treat customers properly and think they will go to find customers.FM should give a target to them to do at least say 5-10 nos per month per branch which should not be a great issue
Reply
r_ashok41
1 month ago
i agree with you FM talks big instead of seeing where is the loopholes and why is it not happening fast at least .Only talking does not help one has to walk the talk and do something and make is easier for people to recover .Wake up our FM dept and see the ground realities
Reply
pst123
1 month ago
Reclaiming shares,dividends etc. from IEPF is a harrowing experience.It is next to impossible to recover your assets from IEPF without seeking professional help that too after spending a fortune and lot of time.It is understood that whole process is centralised at Delhi with skeleton staff.Why can't MCA create dedicated IEPF Desks whereever they have offices across India especially when investors are spread all over India.To begin with MCA can organise Camps frequently at multiple locations.
Reply
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