New Scheme to Cut Unclaimed Bank Deposits
Reserve Bank of India (RBI) is on the verge of framing a proposal to strengthen the protection of bank depositors. It plans to include phone numbers and email addresses in nominees' details in bank accounts. RBI is discussing the plan with banks and the government.
Nomination Regulations May Change Soon
To make this change a reality, the RBI will be amending the Banking Companies (Nomination) Rules, 1985. The objective is to minimize the number of unclaimed deposits by making it convenient and quick to identify nominees.
Latest Amendment Facilitates Nomination Reforms
The Parliament has approved the Banking Laws Amendment Bill, 2024. The bill permits customers to nominate four individuals per account. Customers have to give nominee information while opening accounts or making cash deposits and fixed deposits.
Why Contact Details Are Important
An official told the Economic Times that the gathering of nominee contact details will assist in informing them even in the event of change of address or account holder. It will be convenient to reach out to nominees in the event of unclaimed funds.
The Problem of Unclaimed Deposits
Unclaimed deposits occur when account holders do not close their accounts, forget to withdraw matured deposits, or pass away without their nominees or legal heirs claiming the funds. After ten years, these deposits must be transferred to the RBI.
RBI’s Preventive Action
In order to avert such an event, RBI is working to enhance record upkeep. By making provision for entry of nominee e-mail IDs and telephone numbers, banks can trace beneficiaries, and hence the likelihood of deposits not being claimed remains low.
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