A deposit is classified as unclaimed when a customer hasn’t made any transaction in the account for 10 years or more. Unclaimed deposits include funds in current and savings accounts as well as term deposits.
Unclaimed deposits are transferred to the Depositor Education and Awareness (DEA) Fund, where it is invested in instruments such as government securities.
According to RBI rules, banks must conduct a yearly check on accounts with no customer transactions for over a year. If term deposits are not explicitly renewed, banks should review them to avoid the deposits becoming unclaimed.
RBI also mentions that banks should not label zero balance accounts as 'inoperative' unless they stay inactive for more than two years.
It is mandated by RBI to publish a report mentioning all Inoperative accounts. The first step is to check these. The account holder needs to submit the unclaimed deposits claim form along with a valid identity and address proof document.
After the documents are filed, banks review the claim and once approved, it follows the usual claim settlement process. The total amount payable includes the unclaimed amount plus the accumulated interest paid by that specific bank.
To avoid unclaimed deposits, one needs to have nomination addition, share details with family and close extra accounts.
In the case of a legal heir, one needs to submit the death certificate along with the unclaimed deposits claim form and identity and address proof.