26,697 crore lying in dormant bank accounts: Sitharaman

As of December 31, 2020, as much as 26,697 crore was lying in dormant accounts of banks, including cooperative banks, Minister informed the Rajya Sabha on Tuesday.

Nearly 9 crore accounts haven't been used for 10 years, and this money is lying in them.

As per information received from the Reserve Bank of India RBI on December 31, 2020, the total number of such accounts in Scheduled Commercial SCBs was 8,13, 34,849 and the amount of deposits in such accounts was Rs 24,356 crore, Sitharaman said.

She said there were 77,03, 819 and 2,341 crore accounts not operated for more than 10 years and the amount in such accounts with Urban Co-operative UCBs as of December 31, 2020.

The number of deposit accounts i.e. Public deposits matured but remain unclaimed for 7 years, including the year in which they have matured and the amount in such accounts with NonBanking Financial Companies NBFCs was 64 and Rs 0.71 crore, respectively as on March 31, 2021, she said.

According to the instructions issued by the RBI to vide their Master Circular on Customer Service in Banks, banks are required to make an annual review of accounts in which there are no operations for more than one year and inform customers in writing that there has been no operation in their accounts and ascertain the reasons for the same.

Banks have been advised to launch a special drive to find the whereabouts of the customers legal heirs in respect of accounts that have become inoperative, i.e. She said there were no transactions in the account over a period of two years.

She said banks are required to display the list of unclaimed deposits inoperative accounts which are inactive for ten years or more on their respective websites, with the list containing the names and addresses of the account holders inoperative accounts.

She said that the RBI has framed the DEAF Scheme, 2014, in order to comply with the amendment to the Regulation Act, 1949 and insertion of Section 26 A in the Act.

The cumulative balances in accounts that are not operated on for a period of 10 years or more or any amount remaining unclaimed for 10 years or more along with interest accrued are calculated by the banks and transfer such amounts to the DEAF.

The DEAF is used for promotion of depositors' interests and other purposes that may be necessary for promotion of depositors' interest, as may be specified by the RBI. In the case of demand from a customer whose deposit had been transferred to the DEAF, banks are required to repay the customer, along with interest, and lodge a claim for refund from the DEAF, she said.

She said that the RBI has authorised the board of each housing companies HFCs to adopt an interest rate model that takes into account relevant factors such as cost of funds, margin and risk premium, and determines the rate of interest to be charged for loans and advances.

The application form, along with the sanction letter, has to reveal the borrowers' rates of interest and penal interest, and must be published in the newspapers.

HFCs have been advised to put in place an internal mechanism to monitor the process and operations in order to ensure adequate transparency in communication with the borrowers.