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Banks Transfer ₹37,176 Crore to RBI’s Depositor Education and Awareness Fund in Last 3 Years
Questions have been raised about the efficiency of the DEA Fund in creating customer awareness.
Author: Abhivad
Published: July 3, 2024
In the last three years, banks have transferred ₹37,176 crore to the Depositor Education and Awareness Fund (DEA Fund) maintained by the Reserve Bank of India (RBI). This fund is designed to manage unclaimed deposits from banks, including cooperative banks, that have been lying dormant for ten or more years.
What is the Depositor Education and Awareness Fund?
The Depositor Education and Awareness (DEA) Fund was established to handle unclaimed deposits from bank accounts that have remained inactive for over ten years. Banks, including cooperative banks, transfer these unclaimed deposits to the DEA Fund, which is maintained by the RBI. The initiative ensures that such dormant funds are utilized effectively while maintaining provisions for rightful claimants to access their deposits.
Unclaimed Deposits Transferred by Banks
The unclaimed deposits transferred to the DEA Fund by banks for the financial years 2021-22, 2022-23, and 2023-24 are as follows:
(Excerpt from the RTI response as circulated on Social Media. The table shows the amount transferred to the DEA Fund in crores during each financial year.)
The significant increase in the amount transferred over the years highlights the growing volume of unclaimed deposits being managed by the RBI.
However, questions have been raised about the efficiency of the DEA Fund in creating customer awareness. An anonymous banker on platform X criticised the substantial funds transferred to the DEA Fund, questioning, "How is this money being spent to spread customer awareness? It's almost half of India's School Education Budget." He also pointed out that banks have lost the opportunity to leverage these funds for term deposits (RTD) and current and savings accounts (CASA), suggesting that better management could benefit both banks and customers.
Bank-wise Data on Unclaimed Deposits
According to a written reply by the Minister of State for Finance Bhagwat Karad in the Lok Sabha on April 3, 2023, the State Bank of India (SBI) topped the list with ₹8,086 crore of unclaimed deposits. This was followed by Punjab National Bank with ₹5,340 crore, Canara Bank with ₹4,558 crore, and Bank of Baroda with ₹3,904 crore of unclaimed deposits.
RBI Directions to Banks
The RBI has issued guidelines to banks for the periodic review of dormant accounts and measures to prevent fraud in such accounts. Banks are advised to have a grievance redress mechanism for the expeditious resolution of complaints and take steps to trace the customers of inoperative accounts or unclaimed deposits, including their nominees or legal heirs. These steps include reactivating accounts, settling claims, or closing accounts.
The revised instructions, which came into effect on 1 April , 2024, apply to all commercial banks (including Regional Rural Banks) and cooperative banks. These measures are aimed at reducing the quantum of unclaimed deposits and ensuring that rightful owners or claimants can retrieve their funds.
Centralised Web Portal: UDGAM
To facilitate the process for depositors, the RBI has developed a centralised web portal called UDGAM (Unclaimed Deposits Gateway to Access Information). This portal allows depositors to search for unclaimed deposits across multiple banks in one place, streamlining the process of reclaiming funds.