FSDC pitches for special drive for settlement of unclaimed deposits in banks
The high-powered Financial Stability and Development Council (FSDC) headed by Finance Minister Nirmala Sitharaman on Monday (May 8) asked the regulators to initiate a special drive to settle unclaimed deposits in banks and financial institutions.
Briefing reporters about the discussions in the meeting, Economic Affairs Secretary Ajay Seth said it was deliberated that regulators should conduct a special drive to facilitate the settlement of unclaimed deposits and claims in the financial sector across all segments, such as banking deposits, shares and dividends, mutual funds, insurance, etc.
“It was also noted that, as the Union Budget has announced that unclaimed deposits and shares and dividends are lying in the pool, a drive should be taken by the concerned regulator, especially where the nominee details are available with them, though the nominees may not be aware of that,” said Seth.
Also read: FM Nirmala Sitharaman to review state of economy at FSDC meeting on May 8
“This activity should be taken in a time-bound manner. But where the nominee details are not available, the process has to be put in place,” he continued.
₹35,000 crore unclaimed deposits in public sector banks
About ₹35,000 crore unclaimed deposits as of February 2023 were transferred to the Reserve Bank by public sector banks (PSBs) in respect of deposits which have not been operated for 10 years or more.
These unclaimed deposits belong to 10.24 crore accounts transferred to the RBI as of the end of February 2023.
Last month, the Reserve Bank Governor said that a centralised portal would be ready in three to four months wherein depositors and beneficiaries can access details of unclaimed deposits across various banks.
Also read: Unclaimed deposits: RBI launches awareness campaign
The 27th meeting of the FSDC was attended by all the financial sector regulators, including RBI Governor Shaktikanta Das. This was the first meeting of the FSDC after the passage of the ₹45 lakh crore Budget for 2023-24 with greater emphasis on capital expenditure with an outlay of ₹ 10,00,961 crore.
Daunting challenges from global economy
The council discussed a number of issues starting with the issue of financial stability, noting that there are daunting challenges coming from the global economy.
“It was noted that maintaining financial stability, being on our toes, and maintaining financial stability is a shared responsibility and all the members will be working towards that,” Seth said.
“Regulators should adopt a focused approach to reduce the compliance burden further and ensure a streamlined and efficient regulatory environment,” he said, adding that the progress achieved in this regard would be reviewed by the Union Finance Minister with each regulator in June 2023.
Regulators need to ensure cybersecurity preparedness
“The regulators need to be proactive and ensure cybersecurity preparedness of the information technology systems to reduce the risk of cyberattacks, protect sensitive, financial data, and maintain overall system integrity, thus safeguarding the stability and resilience of the Indian financial ecosystem,” he said.
During the meeting, it was discussed that the policy and legislative reform measures required to further develop the financial sector may be formulated and implemented expeditiously to not only increase the financial access of the people but also increase their overall economic well-being.
Further, the secretary said, the council also decided that wherever legislative changes were required, as announced in the budget, that should be expedited so that the government could take a final view on those matters. The plan is that those lists of changes to the extent of necessary approvals within the government with a competent authority can be put to Parliament for consideration.
Also read: RBI says unclaimed deposits will attract interest, here’s what it says
“Beyond that, the council also discussed issues relating to early warning indicators for the economy,” he added. “The council also deliberated reducing the compliance burden on the regulated entities in the financial sector by improving regulatory quality, debt levels of corporates and households in India, and simplification and streamlining of KYC framework to meet the needs of Digital India,” said the economic affairs secretary.
Besides, the seamless experience for retail investors in government securities, Bimakrit Bharat – Unique Value Proposition to take insurance to the last mile, and support required in terms of resolving inter-regulatory issues for GIFT IFSC to play a strategic role in Atmanirbhar Bharat was also discussed.
The council took note of the activities undertaken by the FSDC Sub-Committee chaired by the RBI Governor Shaktikanta Das and the action taken by members on the past decisions of the FSDC.
Participants in the FSDC meeting
Besides the RBI governor, Securities and Exchange Board of India chairperson Madhabi Puri Buch, Insurance Regulatory and Development Authority of India (Irdai) chairman Debasish Panda, Insolvency and Bankruptcy Board of India (IBBI) chairman Ravi Mital, and Pension Fund Regulatory and Development Authority’s newly-appointed chairman Deepak Mohanty participated in the meeting.
According to sources, the FSDC meeting was also attended by Ministers of State for Finance Pankaj Chaudhary and Bhagwat Kishanrao Karad, Finance Secretary TV Somanathan, Economic Affairs Secretary Ajay Seth, Revenue Secretary Sanjay Malhotra, Financial Services Secretary Vivek Joshi, and other top officials of the finance ministry.
(With inputs from agencies)
