Interest rate on unclaimed funds lying with banks cut to 3.5% from 4%
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The rate of interest payable by banks to the depositors or claimants on the unclaimed amount transferred to the Depositor Education and Awareness Fund shall be 3.5 percent simple interest per annum with effect from July 01, 2018 instead of 4% currently.
When an unclaimed amount is transferred to the Depositor Education and Awareness Fund (DEAF), the bank has to repay a depositor or any other claimant, claiming the deposit or unclaimed (even after the amount has been transferred to the DEAF) , at a rate specified by the Reserve Bank of India. Currently, it is at 4 percent per annum but going forward it will be 3.5 percent simple interest. The settlement of all claims received by the banks on or after July 01, 2018 will be at this rate, until further notice.
As per reports, Unclaimed deposits of bank account holders have crossed a record Rs 8,000 crore, with stricter KYC norms making extraction of funds difficult unless the next of kin of the deceased can establish the legitimacy of their claims.
According to the latest figures released by the Reserve Bank of India (RBI), Rs 8,864.6 crore is lying unclaimed in 2.63 crore accounts with all bank groups as of December 2016. Ironically, unclaimed deposits have doubled in four years between 2012 and 2016 - both by way of volume and value - despite increasing policy support for genuine deposit holders seeking to withdraw funds. #casansaar (Source - ET)
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