RBI Incentive Scheme to Clear Unclaimed Deposits

The Reserve Bank of India (RBI) has introduced a year-long incentive scheme to encourage banks to reduce unclaimed deposits. This move aims to clear the backlog of dormant accounts and prevent further accumulation in the Depositor Education and Awareness (DEA) Fund. The scheme runs from 1 October to 30 September and offers financial rewards to banks for reactivating inactive accounts and returning funds to rightful depositors.

Background and Context

Unclaimed deposits are funds left in bank accounts that have remained inactive for years. Accounts inactive for over ten years transfer their balances to the DEA Fund. As of June 2025, unclaimed deposits totalled over Rs 67,000 crore. These funds remain with banks unless claimed by depositors. The RBI’s new scheme seeks to reduce this large stock and prevent fresh additions.

Details of the Incentive Scheme

The scheme, titled ‘Scheme for Facilitating Accelerated Payout of Inoperative Accounts and Unclaimed Deposits’, offers banks a differential payout. Banks receive a percentage of the amount returned to depositors. For accounts inactive up to four years, banks get 5% of the amount or Rs 5,000, whichever is less. For accounts inactive over ten years, the incentive rises to 7.5% or Rs 25,000, whichever is less. This encourages banks to prioritise older dormant accounts.

Implementation and Compliance

Banks must submit quarterly claims for payouts in a prescribed format. Each claim requires certification by a senior executive authorised by the bank’s top management. This ensures accountability and proper tracking of the scheme’s progress. The quarterly submission system facilitates timely monitoring by the RBI.

Role of Technology and Depositor Awareness

The RBI previously launched the ‘UDGAM’ portal to help depositors locate unclaimed deposits easily. This digital platform simplifies the search process and increases transparency. The incentive scheme complements this by motivating banks to actively contact depositors and resolve dormant accounts promptly.

Impact on Banking and Depositor Rights

This initiative strengthens depositor rights by enabling quicker access to funds. It also improves the efficiency of banks in managing inactive accounts. Reducing unclaimed deposits helps banks clean their books and reduces liability. The scheme supports financial inclusion by encouraging customers to maintain active banking relationships.