Explained: Forgotten bank deposits? Here's how to recover your unclaimed money

Thousands of crores of rupees remain parked in unclaimed bank accounts and deposits across India as savings accounts turn dormant and fixed deposits go unclaimed after maturity. However, the Reserve Bank of India (RBI) has made it clear that these funds remain payable to the rightful owners or their legal heirs, even after being transferred to the Depositor Education and Awareness (DEA) Fund. 

To help people trace such deposits, the central bank has launched a nationwide awareness campaign promoting its UDGAM (Unclaimed Deposits-Gateway to Access Information) portal, which allows customers to search for forgotten bank deposits across participating banks. 

The portal has made it easier to identify such deposits, and customers are encouraged to keep their KYC details updated and operate their accounts periodically to prevent their deposits from becoming unclaimed. 

What happens to money in inactive bank accounts? 

Under RBI regulations, balances lying in savings or current accounts that remain inoperative for 10 years, as well as fixed deposits that remain unclaimed for 10 years after maturity, are classified as unclaimed deposits. The same rule applies to recurring deposits, cumulative deposits, outstanding demand drafts, pay orders, and certain unclaimed electronic credits such as NEFT and ATM transactions. 

Banks are required to transfer these amounts to the Depositor Education and Awareness (DEA) Fund, which has been maintained by the RBI since May 2014. However, the transfer does not mean customers lose ownership of the money. The depositor, nominee or legal heir retains the right to claim the funds at any time by approaching the bank where the account or deposit was originally maintained. 

How to check for unclaimed deposits? 

The RBI's UDGAM portal serves as a centralised platform where customers can search for unclaimed deposits across 30 participating banks. 

Individuals must first register on the portal using their name and mobile number. They can then search by entering the account holder's name, selecting the bank, and providing one or more identification details such as a PAN, passport number, voter ID, driving licence or date of birth. If these identity details are unavailable, the portal also allows searches using the account holder's address. 

Businesses and other non-individual entities can search using the entity's name along with details such as the PAN, Corporate Identification Number (CIN), authorised signatory information or date of incorporation. 

The facility is also available to legal heirs. If the original depositor has passed away, eligible family members can submit the required documents to the bank to establish their claim and recover the funds. 

How do you claim the money? 

Finding an unclaimed deposit on the UDGAM portal is only the first step. Customers must approach the bank where the account was originally held and complete the prescribed claim process. 

The bank will verify the identity of the claimant and seek supporting documents wherever necessary. Once the verification is complete and the claim is found to be valid, the amount is released to the depositor or legal heir. 

What is an inoperative account? 

An account is classified as inoperative if there are no customer-induced transactions for two years. However, becoming inoperative does not automatically make the deposit unclaimed. 

Only when an account remains inoperative, or a deposit remains unclaimed, for 10 years are the funds transferred to the RBI's Depositor Education and Awareness Fund. 

Does failure to update KYC make a deposit unclaimed? 

No. Not updating Know Your Customer (KYC) details does not automatically result in deposits being transferred to the DEA Fund. However, KYC compliance is mandatory under RBI regulations and is essential for uninterrupted banking services. 

Banks are required to complete KYC when opening an account, processing certain high-value transactions, facilitating international money transfers, or whenever there is doubt regarding a customer's identity. KYC is also required for certain financial product sales and specified credit card transactions. 

If customers fail to update their KYC despite repeated reminders, banks may restrict certain services on the account. Under the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, banks may eventually close the account after issuing adequate notice and providing sufficient opportunity to comply.