RBI’s directive on inoperative/unclaimed deposits violated
Moneylife Digital Team 20 June 2012

Karnataka Bank has made a mockery of RBI’s recent directive deadline to put up names and addresses of unclaimed and inoperative accounts. What about your bank? Check out and let us know

If you thought that the recent Reserve Bank of India’s (RBI) directive to banks would make it easier for customers to retrieve long lost deposits of a deceased kin, think again. Apparently, one such bank has violated RBI’s directive, in spirit and word, one week before RBI’s 30 June 2012 deadline for compliance. This was brought to notice by a Moneylife reader. Karnataka Bank, instead of putting names and addresses of unclaimed deposit holders, has instead put the onus on the users to search for names.

In February 2012, RBI had directed banks comply with directives to put up names, addresses and the procedure with respect to unclaimed deposits/inoperative accounts. Vide its circular RBI/2011-12/389 dated 7 February 2012 , it said, “Keeping in view public interest, it has been decided that banks should, in addition to the instructions contained in the above mentioned circular, play a more proactive role in finding the whereabouts of the accountholders of unclaimed deposits/ inoperative accounts. Banks are, therefore, advised that they should display the list of unclaimed deposits/inoperative accounts which are inactive/inoperative for ten years or more on their respective websites. The list so displayed on the websites must contain only the names of the account holder(s) and his/her address in respect of unclaimed deposits/inoperative accounts.”

Further it said, “The list so published by the banks should also provide a “Find” option to enable the public to search the list of accounts by name of the account holder.” The original circular was actually published in 2008.

Do check out this link: http://www.karnatakabank.com/ktk/Inopacts.jsp. You will only notice the search bar and nothing else. This means, in Karnataka Bank’s case, only the ‘Find’ option is provided and not the entire list of names and addresses, as the case should be, as per the RBI circular. Moreover, finding this search page took sometime, as it was neatly tucked away in a corner in the homepage; not everyone is Internet savvy. Will Karnataka Bank change and comply with the circular in spirit as well as word, before the 30 June 2012 deadline?

Moneylife had previously written a piece about the difficulty in retrieving unclaimed fixed deposits. Whether the RBI will take corrective measures to ensure its circular is complied with, both in word and spirit, remains to be seen only after 30 June 2012.

In a last updated release by RBI, on 14 November 2011, Karnataka Bank has had 57,151 unclaimed accounts amounting to Rs1,100 lakh as of 31 December 2010. While the total unclaimed accounts lying with Indian banks, both private, public and foreign, amounted to Rs1,723 crore with 1,03,45,857 accounts yet to be claimed or activated. This is a big number and should not be taken lightly by banks or the RBI. One can imagine the difficulties these account holders, or their kin, will have while trying to claim it or even be aware that they have the rights to claim these accounts.

Comments
Amit Jain
1 decade ago
Still most of the banks provide only search facility e.g. canara bank which is very difficult.
Could you please write an article on this once again?
RAJESH
1 decade ago
The author is sheer perverted.He has not checked the websites of other banks.He has made a very biased statement and is fearful of commenting about public sector banks like SBI or others.PITY!!!!
Rakesh Gujral
1 decade ago
It seems the banks are least bothered about the RBI directives. Banks like SBI, PNB, HSBC and others also violating the RBI directives.

RAKESH GUJRAL
http://www.fundtracers.com
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