June 26, 2014

What is Bank Depositor Education and Awareness Fund Scheme?

There are numerous instances in India, like someone did FD in banks without sharing details with his family. Suddenly if that particular person dies, the obvious result is no one will come to know about such FD and will be with Bank forever. But what if one fine day his family members come to know about such asset ? How to approach Bank and get that amount back?

Bank Deposit

To avoid such complications RBI recently come up with scheme called Depositor Education and Awareness Fund Scheme, 2014. Let us know about this and how this is useful especially in above said cases.

All Banks need to deposit the amount with RBI in this scheme. But how much and from where they need to deposit is guided and is as below.

“the amount to be credited to the Fund shall be the credit balance in any deposit account maintained with banks which have not been operated upon for ten years or more, or any amount remaining unclaimed for ten years or more”. So it is clear that any amount lying with bank unclaimed will be credited to Depositor Education and Awareness Fund Scheme, 2014.

Accounts that include are as below.

  • Savings bank deposit account
  • fixed or term deposits
  • cumulative/recurring deposit accounts
  • current deposit accounts
  • other form of deposit account in any form and with any name
  • cash credit accounts
  • loan accounts after due appropriation with banks
  • margin money against issue of letter of Credit/Guarantee etc. or any security deposit
  • outstanding telegraphic transfer
  • DDs, pay orders, bankers cheques, sundry deposit account
  • unadjusted NEFT credit balances or other such transactions
  • unreconciled credit balances on account of ATM transactions
  • undrawn balance in any prepaid card

or any other amounts which may be specified by RBI from time to time.

So any type of balance which mentioned above idle for ten or more years with bank will be transferred to this scheme. Such collected amount will be invested by RBI and used for spreading the depositor education and awareness about dealing with such issues.

Now once this amount is transferred then how an individual can claim this and get back?

If you claim such unclaimed amount then bank have to give it back to customers. But customers will not get any interest from this scheme. So it is clear that RBI came with this idea to protect the depositors interest. Banks deposit this amount with RBI and in return RBI will take of such unclaimed amount.

Why such complications arrive?

It is mainly due to not sharing the financial transactions with family. There are many instances that mainly female members of family not aware about any financial dealings of male members. This is turn out to be disaster for survival members if the main earning person dies without sharing such information or having a proper WILL.

To avoid such complications, it is always advisable to file all your financial deals in a proper manner. Share such information with your family members like how and when they can access these most important information.

Hope this will be helpful and make you aware about your financial transactions and safe keeping.

Image courtesy of [Stuart Miles] / FreeDigitalPhotos.net

13 Comments

  1. Dear Mr. Basavaraj Tonagatti,

    Such a Wonderful and nice information.

    I Recently came across such incidence of my neighbour, who is a low income, below middle class family head of abt 65 yrs.

    He’s account with Dena Bank, Mumbai was inoperative for about 12-13 years, as he was at his native place for 10-12 yrs.

    In his savings A/c, the balance amount was about Rs. 6000/- in Dec 2014 before it was transferred to DEAF A/c to RBI (in Dec2014), leaving only about 80 Rs. in his savings A/c.

    It seems there was no Letter correspondence from Bank for the whole 12-13 years so far.

    When the neighbour recently approached the bank (As he was at his native place since almost 10 years, but his family is still at the same address as per bank records) – He came to know his savings a/c amount of 6K being transferred to RBI and A/c has been set to DEAF account by bank. MOREOVER, They charges about Rs. 1500+ on not maintaining Min.QAB (Jan2015 till date) – there was no correspondence even on this front by the Bank.

    Now to claim refund from Rbi, the bank has asked to
    a) submit KYC documents,
    b) Pay charges of abt 1500 Rs ,
    c) Fill up a/c re-activation form and
    d) Fill up and submit Claim form to Rbi for Refund Amount.

    While it’s understood and agreed that points a), c) and d) are very much justified and mandatory, WHY THERE SHOULD BE PENALTY CHARGES as mentioned in Pt. b) ?

    The Query on his behalf is :

    1) If a/c non-operative for more than 10 yrs, I can understand that Bank can transfer amount to Rbi under DEAF Fund – HOWEVER – IS THE BANK NOT LIABLE TO MAKE ANY WRITTEN CORRESPONDENCE WITH CUSTOMER (Before OR even After Transferring Amount) ?

    2) Since my neighbour already had approx. 6K Rupees (which was above min.AQB limit), Even if the Bank has transferred amount, Why they have not maintained Min. AQB balance – knowing there will be charges for not keeping min. AQB ?

    3) Is Bank now asking for approx. Rs. 1500+ as charges towards not maintaining AQB Justified – IF THE AMOUNT IN HIS ACCOUNT BEFORE IT WAS TRANSFERRED TO DEAF FUND WAS ALREADY ABOVE AQB?

    4) Has RBI mentioned that WHOLE Amount (inoperative a/c etc) should be transeferred to DEAF a/c to RBI ? and in such event – BANKS HAVE RIGHT TO LEVY/DEDUCT Min. AQB charges ?

    5) If Banks are doing just their own rules/regulations, Can we claim the penalty amount added to the balance amount which was transferred to Rbi on account of DEAF Fund?

    Please Note that I am just trying to help my neighbour who’s not so literate and is below middle income family…

    Would Highly appreciate if you could throw some light on above queries (if possible with relevant supporting sections/circular from Rbi – if any) so I can refer them and go to bank with neighbour to help him recover his HARD EARNED MONEY !!!!

    Thanking You in Advance for your Help,

    Best Regards,
    Bharat

    Reply
    • Bharat-First just ask them whether they communicated your friend about non-maintaining of minimum balance in the account? If so, let them prove the same.

      Reply
    • Hi Basavaraj,

      Many Thanks for your prompt reply…

      I tried replying via the “Reply” option yesterday – but now i dont see my reply any more on the post…

      To Answer your point – My neighbour has already checked with the Bank and the Bank has told him (verbally though) that the Bank has not made any communication/correspondence for last 10-12 years (for inoperative/DEAF/non maint. AQB or for any other matter)

      Could you please advise how to go further on this and Also would appreciate if you can give some more clarity on the 5 query points I mentioned initially (Just reproducing here for your ready reference)

      The Query on his behalf is :

      1) If a/c non-operative for more than 10 yrs, I can understand that Bank can transfer amount to Rbi under DEAF Fund – HOWEVER – IS THE BANK NOT LIABLE TO MAKE ANY WRITTEN CORRESPONDENCE WITH CUSTOMER (Before OR even After Transferring Amount) ?

      2) Since my neighbour already had approx. 6K Rupees (which was above min.AQB limit), Even if the Bank has transferred amount, Why they have not maintained Min. AQB balance – knowing there will be charges for not keeping min. AQB ?

      3) Is Bank now asking for approx. Rs. 1500+ as charges towards not maintaining AQB Justified – IF THE AMOUNT IN HIS ACCOUNT BEFORE IT WAS TRANSFERRED TO DEAF FUND WAS ALREADY ABOVE AQB?

      4) Has RBI mentioned that WHOLE Amount (inoperative a/c etc) should be transeferred to DEAF a/c to RBI ? and in such event – BANKS HAVE RIGHT TO LEVY/DEDUCT Min. AQB charges ?

      5) If Banks are doing just their own rules/regulations, Can we claim the penalty amount added to the balance amount which was transferred to Rbi on account of DEAF Fund?

      Please Note that I am just trying to help my neighbour who’s not so literate and is below middle income family…

      Thanking you again for your help and time,

      Best Regds,
      Bharat.

      Reply
      • Bharat-Sorry your comment was moved to spam folder. I replied to your email.

        Reply
  2. Dear Mr. Basavaraj ji.

    I have an account in Panjab National Bank (Chhaprola Branch) Ghaziabad (U.P) from 1988. Every month my salary from Hero Motors Factory (Mejestic Auto) was to be deposited there. When I left the Hero Motors company (In the year 2002) , I have stopped operating the account.

    But now as I tried to settle my PF account, I have been informed by Provident Fund Office that my Provident Fund was settled in December – 2003 and the cheque is sent to my PNB Chhaprola branch Account.

    Then I visited PNB Chhaprola branch, there my account information is not at all available, as I dont know the complete account number , my account last four digits are “SB-8299” are known to me. I have a copy of account statement taken during 2002, in which the account number is mentioned as “SB 8299”. Please tell me the way to retrieve my account as several Lacs rupees are in my account.

    As per guidelines of RBI every bank has to display such doormat accounts details on their web site, but I have searched all means to find PNB’s display of such accounts. I couldn’t find.

    I am requesting you to guide me with your vast knowledge and precious experience, how to get my account operational.

    Expecting your valuable guidance soon.

    Regards

    K.R.Desai

    Reply
    • Desai-Using that last digists and your PAN, they can easily track that. I don’t know what is forcing them to NOT ACT.

      Reply
  3. Nice information Sir… provided the info very precisely and also understandable to any person. You put a great effort to make this info reach to us. Thanks you very much.

    Reply
  4. you are doing superb work in financial field .salute to u sir thanks

    Reply
  5. Good Article , Doing great work basu, You helped me lot .

    Reply
  6. Good one basa..
    (www.onlinefinancialplanner.in)

    Reply

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