Rs 64,000 crore idle wealth lying unclaimed: Here's how you can claim it

Economic Times: Mumbai: Tuesday, 02 December 2014.

An estimated Rs 37,300 crore is lying unclaimed with insurance companies, banks, corporate houses and the Post Office department. If you add the Rs 26,497 crore lying in inoperative provident fund accounts with the EPFO, the total wealth idling without interest adds up to nearly Rs. 64,000 crore.

Assuming a nominal rate of 8.5%, investors are losing more than Rs. 5,400 crore in interest every year. The interest alone can buy out a mid-sized bank such as Corporation Bank, which has a market capitalisation of Rs 5,367 crore. This estimate does not include many small savings schemes, data for which is unavailable.

One unconfirmed estimate has pegged the unclaimed amount and inoperative accounts in the Public Provident Fund (PPF) at Rs 22,000 crore. That's not unbelievable..

In July, in response to an RTI petition by Aseem Takyar, the Post Office department had divulged that Indira Vikas Patra maturity proceeds worth Rs 896 crore are lying unclaimed in government coffers.

The amount is enough to buy the entire equity of Financial Technologies, which has a market Rs 844 crore. Three months ago, the government set up a committee headed by RBI deputy governor HR Khan to find out how much of unclaimed deposits were lying with the Post Office department and PSU banks. The Khan Committee will submit its report by December 31.

The Post Office department is not the only black hole that has swallowed investors' wealth. Life insurance companies have Rs 5,849 crore of unpaid benefits in their coffers. The Life Insurance Corporation (LIC) has the biggest chunk (Rs 1,548 crore) of unclaimed wealth but Reliance Life Insurance is not far behind with Rs 1,502 crore. Banks too are wallowing in this unclaimed wealth, with Rs 5,125 crore waiting to be collected by depositors and account holders. Then there are corporate houses, which have roughly Rs 3,454 crore in unpaid dividends, unclaimed debentures and deposits.

The Employees' Provident Fund Organisation (EPFO) is also sitting on a massive Rs 26,496 crore in inoperative PF accounts. A PF account is classified as inoperative if there is no deposit for more than three years. Under a new rule introduced in 2011, no interest is payable on the balance in an inoperative account.

EPFO officials say that many of these inoperative accounts belong to people who have changed jobs and not transferred the balance from the previous account. Central Provident Fund Commissioner Krishan Kumar Jalan says the introduction of the Universal Account Numbers (UAN) will help the EPFO trace the owners of the inoperative accounts.

If an amount lying with companies, banks and mutual funds is unclaimed for more than seven years, it is transferred to Sebi's Investor Education and Protection Fund (IEPF). Investors can reclaim the amount by approaching either the fund house, the company or the registrar. Similarly , the RBI has established a Depositor Education and Awareness Fund (DEAF), where unclaimed deposits and bank balances of inoperative accounts flow in after waiting for 10 years.

One can claim this amount even after this transfer. If the accountholder furnishes identity proof, the bank will have to return the amount along with interest applicable.