RBI UDGAM (Unclaimed Deposits – Gateway to Access inforMation) - No need to run around Individual Banks

 

          Please do not run around individual banks to search for Unclaimed Deposits. Just log into the centralized portal developed by the Reserve Bank of India and see the magic of data collation.

This user-friendly platform streamlines the process and offers a one-stop solution for all your unclaimed deposit inquiries.

Unclaimed Deposits: After 10 years of inactivity, savings, current accounts, and term deposits become classified as "Unclaimed Deposits" and are transferred to the Reserve Bank of India's "Depositor Education and Awareness" (DEA) Fund.

Despite awareness efforts, this volume continues to grow due to non-operational accounts, unclaimed matured fixed deposits, and cases involving deceased depositors.

The RBI has introduced a centralized web portal, UDGAM (Unclaimed Deposits - Gateway to Access inforMation), allowing individuals to search and claim these deposits across multiple banks to address this issue.

Unclaimed Deposits, which encompass stagnant balances in savings or current accounts for a decade or unclaimed term deposits beyond their maturity date, are reclassified as "Unclaimed Deposits." Banks subsequently channel these funds into the "Depositor Education and Awareness" (DEA) Fund managed by the Reserve Bank of India.

Importantly, depositors still retain the right to reclaim these deposits, complete with any accrued interest, at a later date by liaising with the banks where these deposits were initially held.

Surprisingly, despite ongoing public awareness campaigns conducted by both banks and the RBI, the total value of Unclaimed Deposits continues to rise.

This surge in Unclaimed Deposits primarily arises from the failure to close inactive savings or current accounts, as depositors no longer intend to use them, or the non-submission of redemption claims for matured fixed deposits.

Furthermore, cases often involve accounts belonging to deceased depositors, with the nominated individuals or legal heirs failing to come forward to make a claim at the concerned banks.

An account qualifies as an Inoperative Account (10 Years and Above) or an Unclaimed Deposit if there has been no activity (apart from interest credits and service charge debits) for ten years or more since the last operation.

 

To address this issue, the RBI has introduced a centralised web portal named UDGAM (Unclaimed Deposits - Gateway to Access Information). This portal facilitates the search for unclaimed deposits across multiple banks, enhancing depositors' access to such data and employing AI tools to optimize search results.

The RBI's overarching objective is to protect depositors, ensuring that newer deposits do not become unclaimed, and unclaimed deposits are returned to their rightful owners or beneficiaries following established procedures.

Collaborating with Reserve Bank Information Technology Pvt. Ltd. (ReBIT), Indian Financial Technology & Allied Services (IFTAS), and participating banks, this innovative platform empowers individuals to identify and claim their unclaimed deposits or reactivate dormant accounts at their respective banks, contributing to greater financial security and transparency.

Disclaimer: This blog post aims to motivate bank account holders to reclaim their funds from their banks. Ultimately, it emphasizes safe ePayments.

Reserve Bank of India releases the List of entities eligible for DEA Fund

          The Reserve Bank of India on 1^st October 2015, released the names of 20 entities that have been approved by the DEA Fund Committee for registration for seeking grant of financial assistance from the Depositor Education and Awareness Fund.

Reserve Bank of India on 9^th January 2015, had called for applications from eligible persons for registration.

RBI received 90 applicants and these 20 entities were finally selected.

There was a multiple selection process which involved a scrutiny by an internal team of the Reserve Bank followed by an assessment of the applications by the DEA Fund Committee, which inter alia has three external members.

The applicants have been selected on the basis of their meeting the minimum eligibility criteria, track record and evaluation of the work done by them in the field of depositor education, consumer awareness, consumer protection, etc.

Reserve Bank will shortly issue a notification calling for fresh applications for registration under the scheme.

The names of the 20 entities are:

Sl No. Names of the Registered Entities

1.        Vasantha Lakshmi Charitable Trust & Research Centre, Nellore, Andhra Pradesh

2.        Society for Social Transformation, A.P.

3.        Voluntary Organisation in Interest of Consumer Education Society, New Delhi

4.        Progressive Action for Community Emancipation (PACE), Chittoor, Andhra Pradesh

5.        International Network of Alternative Financial Institutions-India, Madurai

6.        SAMARPIT- Centre for Poverty Alleviation and Social Research, Bilaspur

7.        Voluntary Integrated Development Society, A.P.

8.        Initiatives for Development Foundation, Bengaluru

9.        MOTHER, Bhubaneswar

10.      Genesis Academy of Banking & Finance Education Trust, Mumbai

11.       MONEYLIFE Foundation, Mumbai

12.      ASSLS Organization, A.P.

13.      Consumer Education and Research Society, Ahmedabad

14.      Consumer Unity & Trust Society (CUTS), Jaipur

15.      Indian School of Microfinance for Women, Ahmedabad

16.      Swadhaar Finaccess, Mumbai

17.      Xavier Labour Relations Institute (XLRI), Jamshedpur

18.      Aparajita Mahila Sangh, Indore

19.      Priyasakhi Mahila Sangh, Indore

20.      DHAN Foundation, Madurai

Indian Institutions can seek financial assistance from the Depositor Education and Awareness Fund

            Reserve Bank of India has recently released the guidelines on Criteria for Institutions, who can seek Financial Assistance from the Depositor Education and Awareness Fund

Key features

i) Objectives and Scope of activities: To grant financial assistance to institutions/ organisations/ associations for taking up various activities relating to promoting bank depositors’ education and awareness.

ii) Eligible entities: The institutions/ organisations/ associations, viz., not for profit public charitable trusts, corporates, universities, etc., who are already engaged in activities relating to bank depositors’ education and awareness or proposing to take up depositors’ education programmes, organising seminars, symposia, etc., including research activities, can be considered for assistance.

iii) Procedure for application: Entities may apply in the prescribed format given as Annex to the Guidelines along with necessary documents/ information as per the list of documents indicated in the application form, to The Chief General Manager, Department of Banking Regulation, Reserve Bank of India, Central Office, 12th Floor, Central Office Building, Shahid Bhagat Singh Road, Mumbai – 400001.

iv) In the first tranche Applications will be received at the above address till the close of business as on February 27, 2015.

Background

Pursuant to the amendment of The Banking Laws (Amendment) Act, 2012, Section 26A has been inserted in the Banking Regulation Act, 1949 that empowers the Reserve Bank to establish a fund called Depositor Education and Awareness Fund (Fund).

The Scheme envisages registration of institutions, organisations or associations and grant of financial assistance to them for promotion of depositors’ interests.

 The Fund has been created and all banks (Scheduled Commercial Banks including Regional Rural Banks and Local Area Banks /Urban Co-operative Banks / State Co-operative Banks /District Central Co-operative Banks) have been advised to transfer inoperative deposit accounts which have not been claimed or operated for a period of ten years or more or any deposit or any amount remaining unclaimed for more than 10 years to the Fund as mentioned in paragraph 3(vii) of the Scheme, banks shall transfer to the Fund the amounts becoming due in each calendar month (i.e. proceeds of the inoperative accounts and balances remaining unclaimed for ten years or more) as specified in  the Scheme and the interest accrued thereon on the last working day of the subsequent month.

 The Fund shall be utilised for promotion of depositors’ interest and for such other purposes which may be necessary for the promotion of depositors’ interests as specified by the Reserve Bank from time to time.

The depositor would, however, be entitled to claim from the bank his deposit or operate his account after the expiry of ten years, even after the unclaimed deposit funds have been transferred to the Fund. The bank would be liable to pay the deposit amount to the depositor and claim refund of such amount from the Fund.

Scope of activities

The scope of activities for which financial assistance would be provided by the Depositor Education and Awareness Fund are as follows:

• Conducting programmes/events for educating or spreading awareness among the excluded sections of the society, about benefits of financial literacy, information about various products available on various channels explaining the procedure/formalities, etc., for enrolment and actual opening of accounts in association with recognised Depositors’ associations/ NGOs etc.
• Holding seminars and symposia for depositors/ depositors’ associations for imparting financial literacy including safe and secure banking.
• Funding projects and research activities relating to depositors’ education, rights awareness, etc.
• Production/ Procurement of material for distribution at exhibitions, seminars, town hall events, outreach programmes conducted for depositors’ awareness.
• Running Media Campaigns on financial literacy, customer protection, etc.
• Other consumer protection/awareness related programmes.

This is only an indicative list in terms of Section 26A(4) of the BR Act, 1949 and the Reserve Bank may consider such other activities which it may deem necessary for furthering the objectives of the Fund from time to time

 Monitoring: The activity of the institutions/ organisations/ associations shall be monitored, post-registration.

The most important part, RBI in order to ensure transparency, the names of registered institutions/ organisations/ associations will be placed on the RBI website.

A flurry of activity will be seen in the prospective institutions in the next couple of months to ensure that all the paper work is as per RBI guidelines.