RBI proposes to use unclaimed deposits for education, awareness

The RBI panel may register various institutions, organisations or associations engaged in activities related to depositor awareness and education

January 22, 2014 8:59 IST | India Infoline News Service
The Reserve Bank of India (RBI) on Tuesday recommended that unclaimed bank deposits worth around Rs. 35 billion, be used for education and awareness among depositors.
According to a draft on the Depositor Education and Awareness Fund Scheme, deposits in the banking sector that haven’t been claimed for at least 10 years will be transferred towards the scheme.

The Banking Regulation Act, 1949 empowers RBI to establish a fund called Depositor Education and Awareness Fund. The Fund will be created by taking over inoperative deposit accounts which have not been claimed or operated for 10 years.
This Scheme may be called The Reserve Bank (Depositor Education and Awareness Fund) Scheme, 2014, the draft said.

This Scheme shall come into force with effect from such date as specified in the Notification in the Official Gazette, it added.

Any amount in foreign currency payable under an instrument or a transaction, that has remained unclaimed for ten years or more, shall be converted into Indian Rupees at the exchange rate prevailing on the date of conversion and transferred to the Fund, and in the event of a claim, the Fund shall be liable to refund only in Indian Rupees, the draft further said.

The central bank also said there would be a committee to administer and manage the fund. This committee would comprise not more than 11 members, as decided by RBI.

An RBI deputy governor, nominated by the governor, would be the ex-officio chairperson of the committee, RBI said.

The funds would be used to promote the interests of depositors. For this, the committee may register/recognise various institutions, organisations or associations engaged in activities related to depositor awareness and education, from time to time.

Before authorising the release of funds, the committee may examine the proposals and the proposed end uses of the grants. It may also seek information on, or verify, the end use of funds granted to such institutions. RBI said the committee might also take action, including legal action, deemed necessary and in the interests of the fund, including legal actions, as and when considered appropriate, said RBI.

Members of public, banks, academia, industry and other stakeholders may send their comments on the scheme by February 5, 2014.

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