RBI asks banks to return money in unclaimed deposit accounts to rightful owners within three months

Unclaimed deposits are balances in savings or current accounts that have not seen any activity for 10 years.

STC NEWS MONITORING DESK
SRINAGAR, SEPTEMBER 26 (STC): The Reserve Bank of India (RBI) has asked banks to step up efforts to return unclaimed deposits to rightful owners, nominees, or heirs over the next three months. The apex bank has set October to December 2025 as a focused period for clearing pending claims and reactivating dormant accounts.
Unclaimed deposits are balances in savings or current accounts that have not seen any activity for 10 years, or term deposits that remain unclaimed for 10 years after maturity. Such funds are transferred to the Depositor Education and Awareness (DEA) Fund managed by the RBI, though claimants can access them at any time by approaching their banks.
According to RBI data, the size of unclaimed deposits is rising sharply. As of March 2024, unclaimed balances stood at about Rs 78,213 crore, showing a nearly 26 percent jump over the previous year.
To support its latest drive, the RBI recently revised rules on inoperative accounts and unclaimed deposits. The changes are aimed at making it easier for customers to update KYC (Know Your Customer) documents and claim funds. Now, customers can complete KYC updates at any bank branch, through video-based verification (V-CIP), or with the help of business correspondents (BCs) in their local area.
The central bank is also promoting its UDGAM portal (Unclaimed Deposits – Gateway to Access Information), which allows individuals to check if they have unclaimed deposits across multiple banks using a single online search. Since its launch, more than 8.5 lakh users have already accessed the platform.

Why this matters and what are the challenges

• It helps clean up bank balance sheets, as unclaimed deposits remain a liability for banks.
• ⁠It improves customer welfare, returning idle funds to their rightful owners.
• ⁠It supports financial inclusion and trust, especially for families who may not know about dormant accounts of deceased relatives.
• ⁠Banks will face heavy operational pressure to process claims and verify documents within three months.
• ⁠There are fraud risks, as relaxed KYC processes such as video verification may attract false claims.
• ⁠A lack of awareness among customers remains a hurdle, especially in rural areas where people may not know about dormant accounts.

It will interesting to watch in the next three months at what pace at which banks settle claims and reactivate accounts, what is the number of successful claims made through the UDGAM portal, the kind of outreach efforts by banks and the RBI to spread awareness, and the cost burden on banks from handling verification and processing.
According to banking experts the RBI’s directive highlights its focus on protecting depositors and strengthening transparency in the banking system. While the three-month push is ambitious and may test the capacity of banks, it is expected to improve public trust and bring long-forgotten funds back into circulation, they added.
(Straight Talk Communications)