India - Banks sitting on Rs 1200 cr in Idle A/c

Commercial banks in the country are sitting on funds of over Rs 1,200 crore lying idle in about two crore accounts for the past 10 years.

This is despite a circular issued by the Reserve Bank of India in November 1989 instructing banks to trace customers or legal heirs of the unclaimed accounts. The disclosure was made in reply to an RTI plea filed by Sidharth Misra, a resident of Cuttack, Orissa.
The reply said that an amount of Rs 1207,35,54,334.23 is lying idle with banks across India. This unclaimed amount belongs to 1,74,38,100 account-holders. According to the RBI reply, the quantum of unclaimed deposit is highest in the rural regional banks. It comes to Rs 1156,98,70,277.68.
“The banks take this order in letter, not in spirit, and wash their hands off by sending a simple letter to the account-holder,” an RBI official said on the condition of anonymity.
Misra, who said he had filed the RTI after many widows in Cuttack had complained that the banks were reluctant to give them their rightful dues, said, “This huge quantum of money is lying idle with the banks and will remain idle in the near future because the right heir to this money is not aware of it,” Misra said.
Nationalised banks account for the highest unclaimed amount, totalling Rs 794,17,41,124.18. The number of idle accounts in these banks in the past 10 years is 72,45,581.
“The bank should take serious note of these account-holders who do not fill up the nominee category in the bank forms. Despite rules which make it compulsory to fill the nominee form, many banks do not insist and then, when the account holder disappears/dies, the money stays with the bank for an indefinite period,” Misra reasons. The data given by RBI enumerates 10 years starting from the year 1996-2006.
“Claiming such money is a tedious task. There are a lot of procedures and formalities such as proving identity and sifting through old data which deters the genuine claimant of her/his legitimate money.
“Moreover, if the amount is equal to the fine charged by the bank, there is no point claiming such money,” a senior bank official said.