Finders keepers' is an idiom that does not apply to banks. According to reports, about Rs 1,200 crore of unclaimed deposits are lying idle with banks. The Reserve Bank of India (RBI) has been advising them to reduce their non-operative accounts and use methods such as putting up names on the websites or contact account holders through existing mailing addresses.
However, if these have not helped you, the do-it-yourself process is not complex. But it is time consuming. More so, if the number of years that have passed since you accessed your account becomes longer.
Typically, if you have not used a bank account for three-four years, the bank blocks it.
But it will not close or discontinue an account that is unclaimed or untouched for 10-15 years. If it is a savings bank account, the banks will block it, which means that withdrawals will not be allowed and deposits will be scrutinised and verified thoroughly. This is to prevent any fraudulent use of the account holder's identity.
The balance continues to earn the savings bank rate of four per cent (for most banks). To claim the amount, the customer has to write to the branch with details such as name of the deposit holder, amount, date of maturity, account number and the reasons why the amount could not be claimed. The bank releases the amount after verifying the details and the signature of the deposit holder.
Deposits, older than five years, may take slightly longer because the local branch is required to send deposits older than five years to the head office.
So, even after providing details, it may take a few days for the correspondence between the head office and the branch because in addition to the depositor's personal information, details like branch code and account reference number have also to be verified.
In some cases, the bank may also ask for verification from a person known to the bank and the customer. The entire process would not take more than 10 days, says H N Vishweshwar, general manager, planning and development, Syndicate Bank.
In case of a fixed deposit (FD), the interest is paid till the maturity. After that it will not earn any more interest. If there is a loan against the FD, the bank settles the loan amount and the balance, if any, is kept aside for redemption.
In addition, if the minimum balance is not maintained, the bank will deduct charges. So, it is advisable for customers to conduct a transaction from the account at least once in six months to keep it active, says Ram Sangapure, general manager, Central Bank of India.
Unclaimed deposits are on the decline because of implementation of Core Banking Systems where all branches are linked. Consequently, it is possible to transfer the account to another city.
In case of death of an account holder, the remaining funds are handed over to legal heirs. The heirs have to provide proof by filing a court affidavit. To avoid this hassle, it is advisable to mention a nominee's name while opening an account.
Banks usually allow for amounts up to Rs 10-15 lakh to be claimed by legal heirs after a simplified verification procedure. In case of larger amounts, the verification process may involve publishing a notice in a newspaper and producing two sureties, says S Govindan, general manager, personal banking and Operations, Union Bank of India.
With the regulator asking banks to set up a regulatory framework for inoperative accounts and unclaimed deposits and to conduct periodic review of such accounts, banks are expected to become more aggressive. But even as banks do their bit, customers can avoid such situations by taking these simple steps.