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Published Dec 11, 2024

The Rise of Unclaimed Assets in India: A Deep Dive into Current Statistics and Recovery Processes

India has seen the rapid growth of unclaimed assets over the past few years, which is problematic as well as challenging for both the individual and financial institutions.

To battle this rapidly emerging issue, specialists in IEPF claim and shares recovery services, Clearclaim, have taken the lead. This all-inclusive guide attempts to study the current scenario of unclaimed assets in India, look into reasons behind its growth, and provide relevant information about recovery processes.
  • The Shocking Statistics: Unclaimed Assets in India states that the scale of unclaimed assets in India is indeed impressive.
    • Let’s look at the numbers:
  • Banking Sector: In its annual report, RBI commented that unclaimed deposits in banks rose by 26% to Rs. 78,213 crore till March 2024.
  • Investor Education and Protection Fund: Unclaimed dividends and interest IEPF had until July 2023 was of an amount of Rs. 5,714 crore. But it does not include the amount of unclaimed shares.
  • Unclaimed Shares: A recent research on 1,561 listed companies had indicated that as of August 2024, unclaimed shares worth an astonishing Rs.1,00,000 crore were transferred to the IEPF.
  • Mutual Funds: Around Rs. 35,000 crore remains unclaimed in mutual fund investments.
  • Employee Provident Fund: The EPFO is believed to hold around Rs. 27,000 crore in unclaimed funds.
  • These numbers make for a clear example: There are well over Rs 8 lakh crore ($100 Bn) in unclaimed assets in India, which is quite a sizeable portion of this country’s wealth lying idle

    • What explains the rise in unclaimed assets?

    There are several reasons why the reserve of unclaimed assets is increasing.

  • Lack of awareness: Most people do not know that some investments have been made on their behalf or that there are forgotten accounts.
  • Poor record keeping:Some financial institutions cannot trace the original owners due to poor records and outdated contact information.
  • Inheritance complexity: Issues involving deceased account holders usually involve complex procedures that lawfully entitled heirs often find quite challenging to undertake.
  • Movement: People move within the country or out of the country, and they lose touch with their investments or fail to update their contact details.
  • Regulatory changes: Rapid changes in financial regulations result in confusion and sometimes inadvertently lead to non-compliance.
  • The recovery process: A step-by-step guide to navigating the process. This process can be overwhelming for the individual seeking to recover assets. Here is a step-by-step guide to help you through the recovery process.
  • Identify Your Unclaimed Assets: Use the IEPF website www.iepf.gov.in to search for shares and dividends not claimed yet. Contact banks, insurance companies, and mutual funds with respect to unclaimed or dormant accounts and policies you may have.

    • Gather Your Documents:

    • ID proof like your Aadhar
    • PAN card
    • Proof of Address
    • Original investment documents (if possible)
    • Legal heir certificate in case of demise of the account holder
  • File a Claim: Fill Form IEPF-5, online on MCA. For Bank Deposits file a claim with the relevant bank in the respective branches. To claim insurance and mutual fund submit your request with the companies themselves or their respective registrars.
  • Follow up regularly about the status of your claim based on the reference number given. Be ready with additional information at the request of the same.
  • Seek Professional Help: If all these processes are getting too messy, find an expert that can manage the recovery for you like Clear Claim, so that everything runs smoothly.
  • New Regulatory Developments Regarding Unclaimed AssetsIndia’s financial landscape is evolving as these developments aim to curb the phenomenon of unclaimed assets
  • Banking Laws (Amendment) Bill, 2024: It expands what can be transferred to the IEPF, and that includes shares on which dividends are not claimed over seven consecutive years and that of interest or redemption, or amounts, as the case may be, in regard to bonds introduced.
  • UDGAM Portal of RBI: The Reserve Bank has recently introduced an integrated web portal where anyone from public could view unclaimed deposits across the entire network of banks.
  • Increasing ease in nomination: With new guidelines, now you can easily get as many as four nominations.
  • Hopefully, that might reduce your chances of unclaimed account and even becoming dormant.
  • Impact on Individual and Institutions:The volume of unclaimed assets creates long-term ramifications.
  • For Individual: Realisation of potential loss of the right wealth and the returns generated from your investment and missed opportunities to create wealth in terms of the financial return. Risk of your assets to be forfeited permanently as a government fund.
  • For Institution: Administrative burden of holding a huge volume of dead accounts to maintain Regulatory pressure on customers’ access and re-unification efforts to avoid reputational loss from having unclaimed asset.

    • Conclusion:

    Taking action on Unclaimed Assets is in Volume:

    This will mean that for individuals, knowing their investments is crucial, and financial records are to be updated regularly. For financial institutions, an immediate need is the improvement of channels of communication and claim procedures. At Clearclaim, we bridge this gap through the efficient reclamation of rightful owners’ assets. Whether you are an investor seeking to recover lost investments or a financial institution seeking to improve the management of your unclaimed assets, our experience will help you through this complex process. Do not let your hard-earned money go unclaimed. Act now to recover what is rightfully yours. For further information on how we may assist you to better comprehend the world of asset recovery, kindly visit Clearclaim.