RBI Launches Incentive Scheme to Reduce Unclaimed Deposits

The Reserve Bank of India (RBI) has announced a new incentive programme to tackle the issue of unclaimed deposits across the banking system. Called the Scheme for Facilitating Accelerated Payout of Inoperative Accounts and Unclaimed Deposits, it will be in force from October 1, 2025, to September 30, 2026. The initiative is designed to encourage banks to identify, reactivate, and refund dormant accounts efficiently.

How the Scheme Works

Under the framework, banks will receive payouts depending on the age of an inactive account and the balance in it. For accounts lying idle for up to four years, banks will get 5% of the deposit amount or ₹5,000, whichever is lower. For accounts dormant for over ten years, the incentive increases to 7.5% of the deposit value or ₹25,000, whichever is lower.

Currently, balances in accounts that have been inactive for more than a decade are transferred to the Depositor Education and Awareness (DEA) Fund. Even so, depositors or their heirs can reclaim their money later. The RBI expects this scheme to reduce both the stock of unclaimed deposits and prevent new additions to the DEA Fund.

Implementation and Oversight

The RBI has asked banks to pursue depositors more proactively to settle such accounts. Claims for incentives must be filed quarterly in a prescribed format, signed by a senior executive appointed by a bank’s top management.

As of June 2025, unclaimed deposits in the banking system had crossed ₹67,000 crore. Earlier, the RBI had launched the UDGAM portal to make it easier for customers to search and recover their unclaimed funds.

Read More: RBI Holds Benchmark Interest Rate Unchanged at 5.5% for Second Consecutive Meeting!

Conclusion

By linking financial rewards to banks’ efforts, the RBI is hoping to speed up the process of returning idle balances to rightful owners. The scheme has the potential to significantly reduce unclaimed deposits while reinforcing trust in the banking system.

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