Nearly Rs 2 Lakh Crore ‘Unclaimed’ in Banks, EPF, Mutual Funds, Shares: Could Some of It Be Yours?
A staggering Rs 1.96 lakh crore worth of assets remain unclaimed across India’s financial system, lying dormant in banks, EPF accounts, mutual funds, and shares. This represents a vast amount of wealth that has either been forgotten, overlooked, or lost due to the complexities of the claim process. Could some of it be yours? Here’s a deeper look at the issue of unclaimed assets in India and the proposed solutions to address it.
- The unclaimed assets range across multiple financial products, from bank deposits to life insurance policies and investments in shares.
- Many families unknowingly possess these assets, but the current claiming process is so complex that it deters potential heirs from recovering them.
What is the Scope of Unclaimed Assets?
The data surrounding unclaimed assets is shocking. As of September 30, 2024, Rs 84,393 crore worth of listed shares are lying with the Investor Education and Protection Fund (IEPF), waiting to be claimed by rightful owners. On top of that:
- Bank deposits worth Rs 42,270 crore were unclaimed until March 31, 2023.
- Post deposits stood at Rs 32,273 crore as of September 2020.
- EPF amounts that are inoperative amounted to Rs 8,500 crore as of March 2024.
- Unclaimed life insurance payouts reached Rs 20,062 crore.
- Mutual funds had Rs 2,600 crore in unclaimed assets for the financial year 2023.
- These unclaimed amounts are scattered across various financial instruments, with no easy way for heirs to identify or claim them.
- The amounts reflect the lack of awareness and the complexity of claiming these assets.
Why Are These Assets Unclaimed?
The main reason for the large volume of unclaimed assets is not fraud but rather the lack of awareness. Many potential claimants simply do not know that these assets exist in their name. Furthermore, the systems in place for claiming these assets make it extremely difficult to search and claim them.
- In most cases, searching by name is not allowed unless the asset is linked to the IEPF.
- For example, if someone’s family member invested in mutual funds or life insurance without leaving proper documentation, the heirs may never know that an asset exists.
Harsh Roongta, a personal finance expert, highlights that the real issue is the complexity of the search process. People give up because the search is time-consuming and not user-friendly, leaving vast amounts of wealth unclaimed.
Proposed Solution: Formation of CUPA
To solve this issue, there is a proposal to form a Central Unclaimed Property Authority (CUPA). This central body would collect data on all unclaimed properties from banks, insurance companies, PF accounts, mutual funds, and shares. The key benefit of CUPA would be to allow citizens to search for unclaimed assets simply by entering their name.
- CUPA would centralize information from various financial institutions into a single platform, making it easier for people to identify and claim any unclaimed assets in their name.
- This would bring transparency and efficiency to the process, enabling more people to recover their assets.
A Supreme Court panel has already recommended the formation of such an authority, but the path remains challenging due to multiple regulators and the resistance to change.
Global Examples of Success
Countries around the world have adopted systems that have successfully dealt with unclaimed property:
- In the United States, each state has its own “Unclaimed Property” website, where citizens can simply enter their name to check if they have any unclaimed assets.
- The United Kingdom manages unclaimed assets centrally, providing clear instructions on how individuals can claim them.
- These systems have proved effective in making it easier for individuals to recover lost assets, providing a clearer process and better public awareness.
What Needs to Be Done in India?
India can learn from these global examples, and several steps can be taken to ensure that unclaimed wealth is returned to its rightful owners:
- Formation of CUPA: A central body that tracks all unclaimed assets in one place.
- Centralized search platform: A portal where people can easily check for any unclaimed property using their name.
- Awareness campaign: Educating the public about the existence of unclaimed assets and how to claim them.
- Simplifying the process: Making documentation and verification simpler for the common citizen.
If implemented, these steps could help millions of families recover wealth that might otherwise have been lost to the system.
The issue of unclaimed assets in India is significant, with Rs 1.96 lakh crore lying untouched in various financial institutions. The formation of a Central Unclaimed Property Authority (CUPA) could bring transparency and ease to the process of claiming these assets, benefiting countless individuals and families. The time has come for a system overhaul that allows for simplified access to unclaimed wealth, ensuring that it reaches those who are rightfully entitled to it.
