The Supreme Court on Tuesday granted four weeks to the Centre and the RBI to place before it affidavits on the steps being taken to refund an estimated ₹45,000 crore of unclaimed funds belonging to deceased persons lying with various banks and financial institutions, but not claimed due to lack of awareness or other reasons by their legal heirs.
A bench of Justice Vikram Nath and Justice Sandeep Mehta passed the directions after additional solicitor-general N. Venkataraman and senior advocate Ranjit Kumar both sought four weeks’ time to present their stance on the issue.
The court was dealing with a PIL filed in 2022 by financial analyst and journalist Sucheta Dalal for facilitating refund of an estimated ₹45,000 crore of unclaimed public funds lying in government owned funds viz. the Depositor’s Education and Awareness Fund (DEAF), Investor’s Education and Protection Fund (IEPF) and Senior Citizen’s Welfare Fund (SCWF) on the ground that the same were not claimed by the legal heirs/nominees.
The court had issued a notice in the matter in 2022.
On Tuesday, advocate Prashant Bhushan, appearing for the petitioner, suggested that the RBI should create a “centralised searchable” mechanism, so that the legal heirs can obtain necessary information and initiate the process for refunds.
However, Venkataraman argued that such a proposal was not advisable as it involved sensitive issues relating to privacy and security of public funds. The bench, however, questioned the Centre as to how such unclaimed funds will be disbursed in the absence of a proper mechanism to trace the legal heirs.
Bhushan noted that banks, as trustees of public money, are bound to refund unclaimed funds to genuine heirs on the production of a succession certificate.
According to Dalal, funds often remain unclaimed because heirs are unaware of the accounts, and banks fail to track them. Despite RBI circulars, few banks have taken the initiative to find the whereabouts of account holders.
Furthermore, information on the IEPF website is difficult to access due to technical glitches, forcing people to engage middlemen. The bench granted the additional four weeks and posted the matter for further hearing to May 5.