When last checked on the 31st of March 2019, a big amount of Rs. 25000 crores were lying in the Depositors Education & Awareness Fund (DEAF). The Depositors Education & Awareness Fund or for short known as DEAF is a fund that was launched by the Reserved Bank of India (RBI) to form a collective for all these unclaimed bank deposits. This fund was made in the year 2014 and the amount was close to Rs. 7875 crores in March 2015. All these unclaimed funds are caused by problems like there are people who don’t even share the basic financial details with their family members.
It is common for people to open multiple bank accounts these days since it’s more convenient that way but if not handled properly it is easy to lose track. Privacy at its place is understandable, but it is important to share information with close family members for situations that are uncalled for and if for some reason something were to happen to the person, his family will have to deal with those problems while being unaware of his financial details.
As mentioned by Rama Subramaniam Gandhi who was a former deputy governor at the Reserve Bank of India, there are 2 reasons why the balance in DEAF goes up. First is the unclaimed money and the second is the return which was earned on those deposits. All the money which was transferred to this fund from the various banks is then used in the investment in securities, namely securities such as the government securities by a committee specifically made by the RBI for that purpose. This unclaimed amount can be claimed at any time by proving the ownership and showing their documents. One thing to be noted is that the RBI actually pays interest on the total deposited amount which keeps on revising time after time. This makes it even more meaningful for people to claim their money back.
Though all of it sounds like common sense, some people still do not claim their unclaimed amounts back from these banks and thus it becomes necessary for these people to be made aware of making their claims on a timely basis. And for that purpose, SEBI’s Investor Education & Protection Fund or IEPF was created as well. We will discuss this IEPF later on, but first, let’s understand how exactly this money ends up in the DEAF and can the money can be claimed back from there.
DEAF: Unclaimed Money
As mentioned previously, unclaimed money is that amount of money that is yet to be claimed by the account holder. There are RBI regulations which specify that if there is a bank account which remains inactive for 10 years or more, then all the sum of money present in that account can be transferred to the DEAF. For an account to be considered inactive, there have to be no transactions from that account for 2 years and this does not include the credit interest your account receives from time to time or the maintenance charges which are charged on your account. When this happens, generally the bank will contact the customer through their email or contact no. but it doesn’t work in some cases because the contact information has not been updated for years. So it is always recommended to keep your details and contact information updated.
If even after that the account remains inactive, then the bank will transfer the money from the account to the DEAF along with the interest that has been accrued.
DEAF: How to Claim Your Money Back?
After a long period of inactivity, it is safe to say that you’re not aware of what amount of money was transferred to DEAF from your respective bank. According to the regulations set by the RBI, all the banking organizations must mention the legit amount of unclaimed deposits which they currently have on their bank’s official website. You can check your particular details on the matter on that website and then the next step for you will be to visit one of the branches of the banks of your comfort and along with yourself bring the following documents:
- Duly filled claim form.
- Receipts of the deposits.
- Know Your Customer (KYC) documents.
These documents will be required and will prove helpful in claiming your money back from the bank.
In case of claiming the money back as a nominee or a legal heir to the deceased person, you’ll need the following documents with you for the bank to release the payment:
- The deposit receipts of the account.
- Identity proof of self.
- A copy of the death certificate of the account holder.
When the legitimacy of the documents is verified and proven that they are genuine, the bank will release the payment and you’ll be able to claim the money.
If you’re trying to get the claim from an old bank account created at a time when digital banking wasn’t really a thing and everything took place in a traditional manner, then it might be possible that you will end up facing some difficulties because of your old bank account. In this case, it is best for you to visit the closest branch or the bank branch where you had your account created originally. It is possible that they can provide you with some aid in the matter and resolve your issues by updating your bank account and with your updated details.
Now if you’re wondering what happens next, your part in this procedure is done and you’re completely out of the equation now. After you’ve made the claim, your account will no longer remain non-operative and now you can use it for carrying out transactions again. In case you did the whole procedure for the legal heir or nominee then the settlement of the bank account will take place and then there will be no charges left for that account.
One thing to be noted is that since the payment was made by the bank on behalf of DEAF, the bank now makes a claim to RBI to get its money back from DEAF which it paid to you after you made the claim.
About Investor Education & Protection Fund (IEPF)
Now, as mentioned above, let’s talk a little about IEPF. If you have made any investments in securities or the share market and are actually looking for some help in that matter, then it is advised that you visit the online website of IEPF. IEPF is a fund put together by the government consisting of all the unclaimed investments which were made in the share market. IEPF also performs many important roles for the shareholders and the investors such as spreading awareness on the matter of claiming your investments on time and keep track of them daily so you don’t end up forgetting about them in the future. It also educates its investors on what to do and the whole procedure on what are the best steps to follow in case they want to reclaim or redeem their investments and shares they have bought in the past.
DEAF: Important Things to Remember
Now that we know how unclaimed money comes into the DEAF and how your amount can be claimed back, let’s look back at some important things which are important and are needed to be remembered.
Maintaining records is a very crucial thing. It is a very important thing to keep track of all your financial details like your banking details, your liabilities, especially the investments you made in the past. These investments might not look as important at the start but as time passes they become something big and more important. So forgetting about them might turn out to be a big mistake and lead you to face loss in some way or another. It is also important to share the necessary financial information with one other member of the family just as insurance just in case something were to go wrong and the other person will be aware of the important financial inform. This will ensure that money is going to the right and trusted person. Keeping in mind to do a check-in on the banking website or visiting the bank’s branch to confirm if there are any changes or anything that needs to be verified since if not done on time can cause your account to be deactivated in the worst-case scenarios.
And, this will now conclude on how to claim your unclaimed bank deposits back. It was all only possible because of DEAF since it has made the entire procedure easier and saves up all the unclaimed amount from the non-operational bank accounts so that it can later be claimed by the account holder by following some small simple steps!