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Informist, Thursday, Aug. 7, 2025

MUMBAI – The Reserve Bank of India Wednesday released draft directions on the settlement of claims in respect of deceased customers of banks. The central bank has sought feedback on the draft directions by Aug. 27.

The directions aim to standardise the documentation for settlement of claims for deposits accounts in banks and articles kept in safe custody or safe deposit lockers of deceased bank customers. RBI Governor Sanjay Malhotra Wednesday said the move is expected "to make settlement more convenient and simpler". The draft circular aims to put the directions from Jan. 1.

Balances in savings and current accounts that remain inoperative for 10 years, or term deposits not claimed within 10 years from the date of maturity, are classified as unclaimed deposits.

For settlement of claims in cases where a deceased depositor had not made any nomination, a bank shall fix a threshold limit subject to a minimum of INR 1.5 million.

Banks will have to settle claims in deposit accounts of a deceased customer within 15 calendar days from the date of receipt of all the claim documents. "In case of safe deposit locker/ articles in safe custody, the bank shall, within 15 days of receipt of all the requisite documents, process the claim and issue communication to the claimant for fixing the date for taking inventory of the locker/articles in safe custody," the RBI said. 

If any deposit-related claim is not settled within this timeframe the bank will have to pay a compensation in the form of interest at 4% over the prevailing Bank Rate on the settlement amount. In claims related to safe deposit locker and articles in safe custody, banks will pay compensation of INR 5,000 for each day of delay to the claimants.

Banks held INR 670 billion worth of unclaimed deposits as of Jun. 30, Minister of State for Finance Pankaj Chaudhary said in a written reply to a question in the Lok Sabha at the end of July. Out of INR 670 billion, public sector banks held INR 583.30 billion unclaimed deposits while private banks had INR 86.74 billion, Chaudhary said. 

In a release in June, the central bank issued revised instructions for banks on settlement of unclaimed deposits with immediate effect. The measures included facilities for updation of know-your-customer details for activation of inoperative accounts and unclaimed deposits at all branches. The RBI also instructed banks to provide for updation of KYC in such accounts and deposits through a video-customer identification process.  End

Reported by Shubham Rana

Edited by Deepshikha Bhardwaj

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