Context:
The Reserve Bank of India (RBI) has launched the UDGAM portal to enable citizens to easily search for unclaimed bank deposits across multiple banks.
Key Highlights:
Government / Regulatory Initiative
- UDGAM (Unclaimed Deposits Gateway to Access Information) is an online portal developed by the RBI.
- It allows users to identify unclaimed deposits in different banks through a single platform.
Portal Functionality
- Users can search deposits using:
- Account holder name
- Bank name
- PAN number
- Date of birth
- The portal only provides information about unclaimed deposits, not the claim process itself.
Operational Details
- Depositors or legal heirs must contact the respective bank directly to claim the funds.
- The portal displays participating banks where deposits are held.
Definition of Unclaimed Deposits
- Bank deposits that have remained inactive for 10 years or more.
Stakeholders Involved
- Reserve Bank of India
- Commercial banks
- Depositors and legal heirs
Significance
- Simplifies the search process for dormant bank accounts.
- Improves financial transparency and depositor protection.
- Encourages banks to identify and reconnect with depositors.
Relevant Prelims Points:
- Reserve Bank of India (RBI)
- Established in 1935 under the RBI Act, 1934.
- Acts as India’s central bank and monetary authority.
- Responsible for:
- Regulation of banks
- Monetary policy
- Financial stability
- Unclaimed Deposits
- Deposits with no customer activity for 10 years or more.
- Such funds are transferred to the Depositor Education and Awareness Fund (DEAF) maintained by the RBI.
- Depositor Education and Awareness Fund (DEAF)
- Created in 2014.
- Maintains funds from unclaimed deposits transferred by banks.
- Depositors can still claim the amount from the bank even after transfer to DEAF.
Relevant Mains Points:
Financial Inclusion and Consumer Protection
- The UDGAM portal strengthens financial consumer protection by helping citizens track lost or forgotten deposits.
- It enhances transparency in the banking system.
Role in Strengthening Financial Governance
- Promotes digital financial infrastructure in banking regulation.
- Helps reduce idle financial assets and improve financial accountability.
Challenges
- Many depositors remain unaware of dormant accounts.
- Difficulties arise when legal heirs attempt to claim funds due to documentation issues.
- Limited participation of banks initially may reduce portal effectiveness.
Way Forward
- Conduct public awareness campaigns about unclaimed deposits.
- Expand integration of all banks into the UDGAM platform.
- Simplify documentation procedures for heirs claiming dormant accounts.
- Use digital KYC and Aadhaar-linked verification systems to streamline claims.
UPSC Relevance:
- Prelims: UDGAM portal, RBI, DEAF, unclaimed deposits.
- Mains (GS III – Economy): Banking reforms, financial inclusion, consumer protection in the financial system.