In light of the RBI’s latest move with the UDGAM initiative, unclaimed assets have resurfaced as a prominent subject of discussion!
A crucial aspect of this initiative that demands our attention as we delve into the UDGAM initiative is to understand the nature of unclaimed assets and what contributes to that pool in the first place.
Unrecognised claims, also referred to as unclaimed assets, are financial resources possessed by individuals or entities that have been overlooked or untouched for a significant period of time. These assets can materialise in different forms, ranging from bank accounts, insurance policies, stock holdings, dividend disbursements, bonds, inheritances, and many other options.
Unclaimed assets accumulate when beneficiaries or account holders lose sight of their holdings, or in situations where rightful owners pass away without clear instructions for the inheritance of their assets, ultimately transforming them into being unclaimed after a decade of dormancy.
The notion of unclaimed assets holds special relevance within the financial and banking domains, where institutions safeguard these assets on behalf of their customers. Instances of unclaimed assets can stem from a variety of scenarios such as severed communication, incomplete documentation, changes in name or address, inactive accounts, deceased account holders, and more.
They can lead to inefficient utilisation of financial reserves, reduced liquidity in the economy, and potential loss of value over time. Endeavours like the RBI’s UDGAM portal aim to tackle this predicament through the application of technology and data analysis, pinpointing and identifying these dormant assets, consequently fostering economic growth and financial stability upon their release.
Unclaimed Deposits
Gateway to Access Information (UDGAM) is an online portal introduced by the RBI which empowers individuals to effortlessly locate unclaimed deposits dispersed across nationalised banks. This user-friendly portal presents a unique opportunity: either to reclaim the deposited funds or to revive dormant accounts via their respective banks.
As a precursor to the UDGAM portal launch, an initiative of ‘100 Days, 100 Pays’ was set in motion by the RBI, with the goal of resolving the foremost 100 unclaimed deposits from each district’s banks by September 8, 2023.
UDGAM’s novel strategy for identifying unrecognised claims and inactive accounts holds the potential to trigger a range of advantageous outcomes for financial institutions. These encompass enhanced liquidity management, risk reduction, streamlined compliance, and operational excellence. Simultaneously, this initiative nurtures creativity and cultivates a favourable public image.
As financial institutions embrace and harness the capabilities of UDGAM, they can play a pivotal role in shaping a more transparent, streamlined, and customer-centric financial landscape. The UDGAM project represents a new way of thinking about untapped resources.
After considering all factors, one might wonder why there exist unclaimed assets in the first place. The main cause can be attributed to individuals neglecting to formulate a proper financial will. To pave the way for a financial will, it is essential to compile and document the assets one possesses. Despite strides in technology, the go-to tools remain a fusion of excel spreadsheets and cloud storage, which often fall short in terms of updates.
There are several platforms in India that provide provisions for scenarios where asset management is frequently not considered as a personal endeavour. In such cases, these solutions can pose a challenge. This is precisely where the emerging technological startups come into play, offering an intuitive and user-friendly interface for compiling and sharing assets.
Statistics released by the RBI reveal in excess of 1 lakh crore rupees lying unclaimed. It is incumbent upon us, in the interest of our families, to prevent our hard-earned assets from becoming part of this pool.
Vishal Mehta, Founder and Director of Mitt Arv
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