Context: The Reserve Bank of India informed the Supreme Court of India that 30 banks have been integrated with the UDGAM portal to help depositors and legal heirs trace unclaimed deposits of deceased or inactive account holders. These banks account for nearly 90% of deposits held in the Depositor Education and Awareness Fund (DEAF).
Explanation
- UDGAM stands for Unclaimed Deposits – Gateway to Access Information and is a centralized web portal launched by the RBI to enable individuals to search for unclaimed bank deposits across multiple banks through a single platform.
- A bank deposit becomes “unclaimed” when there has been no customer-initiated transaction or activity for 10 years or more, after which the amount is transferred to the Depositor Education and Awareness Fund (DEAF) maintained by the RBI.
- DEAF was established by the RBI in 2014 to receive unclaimed deposits from banks and to promote depositor awareness and financial literacy.
- The portal facilitates only the identification and tracing of unclaimed deposits; actual settlement or withdrawal of funds must be carried out through the concerned bank as per applicable banking procedures and succession norms.
- Dormant accounts and unclaimed deposits commonly arise due to death of account holders, absence of nominee details, migration, forgotten accounts, or lack of awareness among legal heirs.
- The petition before the Supreme Court highlighted that deposits held in post offices, provident funds, and insurance schemes are not yet integrated into the portal, creating difficulties for legal heirs in tracing all financial assets of deceased persons.
- The initiative is significant for improving financial transparency, depositor protection, banking accessibility, and reducing idle unclaimed funds, while also encouraging better nominee registration and financial record maintenance.
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