The Indian government aims to locate nominees for unclaimed financial instruments, including deposits, shares, and insurance policies.
Unclaimed deposits at financial institutions: In an effort to address the rising issue of unclaimed deposits, shares, dividends, mutual funds, and insurance policies, Finance Minister Nirmala Sitharaman has called on all financial regulators to conduct a special campaign. The government aims to locate the nominees and provide them with the benefits of these unclaimed financial instruments. During the meeting of the Financial Stability and Development Council, it was decided that a campaign would be launched to provide information to nominees within a specified timeframe, in cases where their details are available but they are unaware of this information.
Unclaimed deposits in banks reached a staggering Rs. 48,262 crore as of the 2021–22 fiscal year, up from Rs. 39,264 crore in 2020–21, according to the Reserve Bank of India's (RBI) annual report. According to the RBI, banks in Tamil Nadu, Punjab, Gujarat, Maharashtra, Bengal, Karnataka, Bihar, Telangana, and Andhra Pradesh hold the largest sums of unclaimed deposits.
Insurance companies have also been affected by this problem, with a total of Rs. 22,043 crore deposited in life insurance companies till March 31, 2021, with no claimant. Non-life insurance companies have deposits of Rs. 1,241.81 crore as of the same date, which have no claimants. LIC, the country's largest insurance company, alone has unclaimed deposits of Rs. 21,538.93 crore, including interest of Rs. 2911.08 crore on these deposits.
The information received from SEBI reveals that mutual funds had deposits of Rs. 1590 crore as unclaimed amounts till March 31, 2021. This includes Rs. 671.88 crore as unclaimed redemption and Rs. 918.79 crore as unclaimed dividends. The number of unclaimed shares is also staggering, with an estimated 117 crore shares transferred to the Investor Education and Protection Fund (IEPF), valued at around Rs. 50,000 crore, with a dividend of Rs. 5700 crore included on these shares.
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