Dormant assets: India is sitting on a mountain of dormant wealth—an estimated Rs 2 lakh crore in unclaimed financial assets. These include forgotten bank deposits, insurance payouts, mutual fund units, pension entitlements, and dividends. This idle capital is more than just a missed personal opportunity—it is a drag on the economy. That’s why finance minister Nirmala Sitharaman, at the recent meeting of the Financial Stability and Development Council, called for urgent steps to streamline Know Your Customer norms and expedite the return of unclaimed assets across the financial system.
The Reserve Bank of India’s latest annual report reveals a sharp spike in unclaimed deposits—rising 57% in just two years to Rs 97,545 crore as of March 31, 2024. Of this, Rs 78,213 crore has already been transferred to the Depositor Education and Awareness Fund. These are sums left idle in bank accounts for over a decade, now absorbed into the system.
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The problem of unclaimed money
But the problem extends far beyond banks. According to estimates, over Rs 2 lakh crore lies trapped across various segments—insurance policies, mutual funds, post office savings, shares, and employee provident funds. The scale is alarming, and if left unaddressed, this dormant capital will only multiply as the Indian middle class grows in wealth and complexity.
The reasons behind this accumulation are multifaceted. Often, investors fail to disclose financial details to family members. Sudden deaths or incapacitation, paired with cultural taboos around money discussions, leave families clueless about existing investments. The problem is further compounded when account holders relocate—especially in the case of NRIs—without updating their contact details.
Gaps in paperwork are another challenge. Lost documents, missing share certificates, or misplaced fixed deposit receipts—sometimes due to poor recordkeeping or natural disasters—can render legitimate heirs helpless. In many cases, the absence of nominations or wills results in legal disputes that drag on for years.
Dormant assets and systemic roadblocks
Even when families are aware of dormant investments, they face a bureaucratic maze. Reclaiming assets often involves extensive documentation, including multiple KYC verifications and succession certificates. Unlike the RBI’s UDGAM portal, which allows users to trace unclaimed deposits, other sectors lack a unified recovery platform. Shareholders must navigate the Investor Education and Protection Fund (IEPF); mutual fund investors face another set of procedures altogether.
Worse, many citizens don’t even realise they have unclaimed assets. Financial institutions and regulators have done little in terms of proactive outreach. In contrast, countries like the United States have integrated systems to automatically match unclaimed property with rightful owners. There, the burden is on the state to reunite people with their assets. In India, every hurdle is placed in their path.
This is not just a consumer issue—it is an economic inefficiency. Capital that could boost investments, spur consumption, or fund welfare schemes lies unused. It also imposes avoidable operational costs on financial institutions that must maintain these records.
There have been recent efforts to reverse the trend. The RBI’s UDGAM portal now covers over 90% of unclaimed bank deposits by value. Campaigns like 100 Days, 100 Pays have made progress, but these initiatives remain narrow in scope. Meanwhile, the DEA and IEPF funds continue to swell.
A coordinated national push
Recognising the urgency, the government is preparing a sweeping campaign to return unclaimed assets to rightful owners. The plan involves outreach drives across 500 districts, with district-level camps conducted by the RBI, SEBI, the ministry of corporate affairs, IRDAI, PFRDA, and banks. The finance minister has directed that these drives ensure seamless, expedited refunds with minimal red tape.
One major step in the right direction is the implementation of a unified KYC framework by FY26. This will reduce duplication and simplify the claims process across banks, mutual funds, insurance, and pension schemes. The government has also amended the banking law to increase the number of nominees per account from one to four, making inheritance claims easier.
However, more is needed. A unified, searchable database of unclaimed assets—building on the UDGAM model—can be a game-changer. Financial institutions must proactively notify customers and nominees via email, SMS, or public campaigns. Financial literacy drives should promote best practices such as making wills, nominating beneficiaries, and updating contact details.
On the individual front, every Indian with savings or investments must assume responsibility. Drafting a will, sharing investment information with family members, and ensuring nominations are up to date can prevent years of legal agony. Financial advisors too must step in, especially in complex inheritance cases involving NRIs or multiple heirs.
India cannot afford to let this dormant capital remain in limbo. Unlocking these assets is not only a matter of financial justice—it is a necessary step toward economic efficiency and inclusive growth.