A few months ago, a top Reserve Bank of India (RBI) official told me that the staggering volume of unclaimed funds lying dormant with Indian banks exists largely because each individual amount is too small for the rightful owners or heirs to bother about claiming it. I was also told that only a handful of such accounts hold over Rs1 lakh and the rest are trivial sums. Without access to hard data, it was impossible to verify or contradict this claim, ostensibly based on ‘internal feedback’.
Then, quite suddenly, the finance minister (FM) herself took charge, launching a nationwide drive called “AapkiPoonji, AapkaAdhikar” (Your Money, Your Right) on 4 October (https://www.pib.gov.in/PressReleasePage.aspx?PRID=2174806). The question is: What jolted the government awake? And have any genuine systemic changes been introduced under what Nirmala Sitharaman has described as the “3As strategy of Awareness, Accessibility and Action” which is the guiding principle behind the campaign?
As far as I can see, there has been no meaningful change in how unclaimed funds are identified or retrieved. The process remains as cumbersome and distressing as before. We also have no information on the ‘simplified digital tools’ that will make it easier for individuals to trace unclaimed funds. The question is: Will the drive genuinely lead to rightful heirs getting their money back, or is it merely a prelude to declaring these funds permanently unclaimed and transferring them to the treasury?
In August 2024, Moneylife published a detailed study estimating that over Rs2 lakh crore lay locked up with various regulators and government agencies (Forgotten Wealth of Ordinary Indians: Over Rs2 Lakh Crore Locked in Unclaimed Assets). In response to my PIL, RBI told the apex court that it had launched a portal—UDGAM (Unclaimed Deposits Gateway to Access Information)—in August 2023, to help locate unclaimed funds.
This platform has seen little success because the very first step—identifying unclaimed deposits—has been made exceedingly difficult. The logic is self-defeating: people who have lost track of account details, or whose relatives have passed away, are precisely those who cannot navigate such rigid systems. Despite repeated requests, RBI has refused to introduce a Boolean search option (which allows combinations of keywords using AND, OR, NOT operators) which could make the search process flexible and effective, without compromising verification safeguards to prevent fraud.
Incentives for Banks, Barriers for Citizens
The only perceivable difference this time is that RBI has decided to incentivise banks to locate the claimants. Under a new one-year scheme, banks can claim a small percentage of the funds they successfully refund depending on how long the funds were dormant. The incentives are in four slabs: the lowest is 5% (or Rs5,000, whichever is lower) for accounts dormant up to four years, and the highest goes up to 7.5% (or Rs25,000) for accounts dormant over 10 years. (RBI Launches 1-Year Scheme to Facilitate Return of Unclaimed Deposits to Customers)
This sounds promising but also shows that RBI prefers to depend entirely on banks to trace claimants, rather than empowering citizens to find their own money more easily through a transparent search on UDGAM.
This is not the first such campaign. In 2023, RBI ran a widely publicised “100 Days 100 Pays” initiative involving 31 banks. At the end of March 2023, unclaimed deposits stood at Rs42,270 crore. After the campaign, banks refunded a miniscule fraction of just Rs1,433 crore to rightful claimants. Since then, unclaimed funds have soared past Rs78,000 crore.
A Bureaucratic Black Hole
The story is no different when it comes to unclaimed shares, dividends, bonds and interest lying with the Investor Education and Protection Fund (IEPF). The process remains a bureaucratic nightmare. The IEPF Authority, headed by retired bureaucrats and largely insulated from public feedback, routinely promises reforms that never materialise.
To be fair, there has been one genuinely positive move. On 26 September 2025, RBI introduced its “Settlement of Claims in respect of Deceased Customers of Banks” Directions, 2025, that finally standardises claim procedures across banks. The new rules mandate uniform forms, online submission facilities, defined timelines and even penalties for delays (RBI Notifies New Rules for Settlement of Deceased Customers’ Accounts, Banks To Face Penalties for Delays).
This follows the lead of the Securities and Exchange Board of India (SEBI) which had earlier introduced a detailed and time-bound framework for transmission of securities complete with penalties for non-compliance.
However, on other fronts, RBI’s efforts remain inconsistent. A case in point is its confusing handling of know–your-customer (KYC) updates, where initial reliefs proposed in a discussion paper, found no place in the final draft, leaving the potential for harassment intact (Consumer Protection or Lip Service? RBI's Uneven March under Governor Malhotra).
A Flood of Announcements, Little Accountability
In the past week, RBI has proposed a series of ‘pro-consumer’ reforms including a plan to overhaul the banking ombudsman scheme, expanded powers for internal ombudsmen within banks, and even a plan to ‘explore’ a uniform compensation policy for grievances resolved after complaints.
Notably, this would be the fifth revision of the ombudsman framework since 2006. The 2021 update had merged three different schemes (covering non-banking finance companies and digital payments) into one; yet, it failed to make banks more accountable. Unless the regulator genuinely empowers the system to penalise banks for wrongdoing, this revision too may remain cosmetic (RBI Plans Overhaul of BSBD Accounts, Strengthening of Internal Ombudsman and Wider Grievance Redress Mechanism).
Two PILs, Thousands of Crores and Endless Delay
This brings us back to the sudden drive over unclaimed funds that continue to rise relentlessly every year. Even as my PIL, filed in 2022, keeps going from one date to another, often without a hearing, activist-businessman Aakash Goel has filed another petition in the Supreme Court seeking a comprehensive legal and institutional framework to track and return over Rs3.5 lakh crore in unclaimed financial assets to their owners. (Over Rs3.5 Lakh Crore in Unclaimed Financial Assets: Supreme Court Issues Notice on PIL).
Notice, the sums lying dormant, which were already staggering, have doubled in the past three years. Mr Goel had dug up more data by filing Right to Information (RTI) applications and also included the money lying in dormant accounts and pensions. His petition came up for hearing on 6th October and the Supreme Court has issued notice to respondents. Mr Goel tells me that he filed the PIL only because a previous petition in the Delhi High Court and discussions with finance ministry officials failed to yield results.
The Unanswered Questions
Will this new government campaign succeed where previous efforts have failed? The incentives for banks may help recover a small fraction of the vast pool of public money that is impounded; but, unless RBI and other regulators simplify public access to their databases, the impact will be negligible.
Ironically, regulators cite fear of fraud to justify restrictive systems. In practice, this has spawned a thriving market of agents, who scrape official databases, trace potential claimants, and ‘facilitate’ claims for a fee—often, using privileged access or relationships with officials.
The FM has said, “Every rupee saved by citizens must return to them or their families.” But without addressing the core issues -- opaque systems, lack of coordination and a refusal to share information across regulators—this intent will remain a slogan.
For now, India has an ever-growing mountain of people’s money impounded by regulators and two PILs pending before the Supreme Court. Yet, the central plea of both petitions, which is to create a single, user-friendly national database that allows citizens to locate and reclaim their rightful dues, remains ignored. Until that happens, all we have are slogans and multiple, inaccessible portals that lead nowhere.
Comments
vjanakiraman33
1 month ago
It is incorrect to call them 'UNCLAIMED'. It is rightly "claims rejected" on i s not being dotted, and t s not being cut. My requests to the RTAs have always been unsuccessful, in spite of going to their nearest branch, with papers. Karvy has the 'worst' record in my case
What about company fixed deposit and other investment where people's money have vanished due to government lethargic approach, company has closed down but owners and director r still enjoying due to government support...
I had located one letter from SBI JagnathPlot Branch Rajkot Gujarats letter where it had informed that I have been nominated by my mother for her pension account in that branch. The letter was sent to my mother by Bank in 1995….Recently I had approached SBI Jaganath Plot Branch Rajkot with said letter as mother is no moe.Bank had silly reason that they have shifted their premises from old location to new location that is why this letter dated 1995,,,has no value for them and for ME. Means SBI IJagnath Plot Branch does not respect banks own letter. Same thing with BANK OF BARODA Jagnath Plot Branch Rajkot Gujarat. I am having letter from BOB Adress to my Mother (she is no more) to furnish PAN Cards Etc….The letter was sent to us in 2014….I had approached the BOB for details of my mothers account….to settle the said case…BOB Jagnath Plot Branch is not responding despite personal visit to BOB What is the purpose of any announcement by Central Government when respective Banks are not interested to work for customers????
it is high time banks need to work proactively with the deposits with them to locate the people and tell them the same as to the procedure and finish it.
Your struggle starts with getting details of your unclaimed financial assets.Banks,RTAs,Cos stonewall your effort to get details.You may get these details if your Consultant is resourceful.Who has stopped these agencies from going little extra mile to trace rightful owners/heirs and help them.As rightly observed why they don't want to use Boolean Search option to identify rightful owners.From complete names PAN no could be identified.PANs are Aadhaar linked.Based on this information take plain paper affidavits(You have to execute affidavits on Rs 500 Stamp Paper in Maharashtra)and indemnity and return financial assets to rightful owners.If state governments one after another can distribute monthly salaries to ladki sisters from tax collected from citizens,why rightful owners are deprived of their hard earned savings.As things stand today,all these assets will be declared as Benami and transfered to treasury.
What a contrast to India where the rule is to make it as convoluted as possible so someone can extract rent.
I have been trying to close a small NGO with assets less than 5 lakhs for the past 5 years. I have engaged a chartered accountant to handle this matter yet the Charity Commissioner keeps putting the matter off for another hearing. Why is this happening?
People in India are loathe to start NGOs to do much needed work in the social sphere because of the onerous rules. In USA, where I live, the govt says that those NGOs with turnover of less than $50 thousand a year, file a simple form online to meet the reporting requirements.
GoI could do something similar in India with simpler rules for small NGOs and more rules for large NGOs. This would allow small NGOs to work locally to correct so many civic problems.
Yet, this requires a change in mind set because trust in people, in institutions, is sorely lacking in India.
I was doing some work on claims retrieval for the Australian market. They have central and region-wise repositories where you can find your name, last given address and other details along with the unclaimed amount. The process is very transparent and on providing legitimate documents the claims come through very easily. The govt. there encourages agents to become intermediaries for this process and registers them in case a common Australian citizen needs help. Why can't we do this here. The process itself may provide some job opportunities too. Geeta Aiyer
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I have been trying to close a small NGO with assets less than 5 lakhs for the past 5 years. I have engaged a chartered accountant to handle this matter yet the Charity Commissioner keeps putting the matter off for another hearing. Why is this happening?
People in India are loathe to start NGOs to do much needed work in the social sphere because of the onerous rules. In USA, where I live, the govt says that those NGOs with turnover of less than $50 thousand a year, file a simple form online to meet the reporting requirements.
GoI could do something similar in India with simpler rules for small NGOs and more rules for large NGOs. This would allow small NGOs to work locally to correct so many civic problems.
Yet, this requires a change in mind set because trust in people, in institutions, is sorely lacking in India.