The Supreme Court of India on Tuesday intensified its scrutiny of the government’s handling of unclaimed bank deposits, questioning why the details of accounts held by deceased individuals cannot be proactively disclosed to their legal heirs.
A bench comprising Justices Vikram Nath and Sandeep Mehta observed that the Centre and the Reserve Bank of India (RBI) must formulate a comprehensive policy to address the information gap that often prevents families from accessing the assets of deceased relatives.
The court was hearing a Public Interest Litigation (PIL) filed by veteran journalist Sucheta Dalal. The plea seeks a centralized mechanism to inform legal heirs about dormant accounts, insurance policies, and post office funds that currently lie unclaimed in the financial system.
During the proceedings, the bench highlighted the practical difficulties faced by families when an individual dies without leaving a will (intestate) or without completing contemporary KYC requirements.
“Suppose a man has got 10 different accounts in different countries, he dies intestate, how do his heirs get the details? He may not have done the KYC,” the bench remarked. “What we are saying is, what is wrong if we give the information to the legal heirs? You will have to come out with some policy.”
Advocate Prashant Bhushan, representing the petitioner, argued for a “Centralised and Searchable Database.” He noted that even the RBI has previously recommended such a system to help citizens trace the accounts of their deceased parents.
The urgency of the petition is underscored by the staggering rise in unclaimed funds held in the Depositor Education and Awareness (DEA) Fund. Established by the RBI in 2014, the fund collects balances from accounts that have remained inactive for ten years or more.
According to the petition, the DEA Fund has seen a sharp upward trajectory:
- March 2019: ₹18,381 crore
- March 2020: ₹33,114 crore
- March 2021: ₹39,264.25 crore
Representing the Centre, Additional Solicitor General N Venkataraman assured the court that if a “genuine heir” comes forward, the money is indeed refunded from the DEA Fund. However, the petitioner argues that the current system places the burden entirely on the heirs to discover the existence of the accounts first—a task made nearly impossible without a central registry.
The PIL calls for a procedure that eliminates “unnecessary litigation” for heirs trying to claim bank deposits, insurance, and post office funds. Specifically, it requests a database under RBI control that includes the deceased holder’s name, address, and the date of their last transaction.
The Supreme Court has directed the Centre and the RBI to file fresh affidavits detailing their stance and potential policy frameworks. The matter is scheduled for its next hearing on May 5.
