According to the Reserve Bank of India, more than Rs 900 crore is lying idle as unclaimed deposits with banks until the month of December 2005.
Most of the bank accounts have not been operated for a single time in the last 10 years. Changes of place, overseas migration, death of the account holder, absence of any nominee for the account are some major causes behind these inactive accounts. Majority of these accounts are fixed deposits.
A private sector bank employee said that the FD matures but the bank does not get any instruction from the account holder to renew it or to credit to another bank account. Now, the banks have started making levying incidental charges on these accounts.
A senior bank employee said that the bank cannot utilize the money of these dead accounts for any purpose.
According to the RBI directives, it is necessary for banks to maintain a separate register. This is for referring before giving permission for operations in the account.
The RBI is going to contemplate using these unclaimed funds to float a depositor protection fund (DPF). With this funds, the banks would help the government to create greater awareness, financial education and counseling.
However, to start this function, there would be need for an amendment to the Banking Regulation Act.