Unclaimed Investments with Banks, Insurers, PF Organisations and Mutual Funds

Unclaimed Investments with Banks, Insurers, PF Organisations and Mutual Funds

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When mutual fund distributor Bajaj Capital found that a certain investor had not made any new investments in mutual funds for a long time, it decided to check up on him. To their surprise, the officials found that the investor had died a few years ago and his wife had no knowledge about the Rs 2 lakh he had invested in HDFC Mutual Fund. 

“The amount had grown to Rs 9-10 lakh. The lady broke down because she was facing financial difficulties and the money would help her tide over the problems,” says Surajit Misra, executive vice-president and national head of mutual funds, Bajaj Capital.

Similarly Ajay Kumar Parmar had forgotten all about the Sardar Sarovar Narmada Nigam bonds he had bought 20 years ago when he was living in Ranchi. It was only when he heard about another investor getting a good price for his bonds this year that he recalled his own investment.

Not everyone is as lucky though. An estimated Rs 25,000 crore of investors’ wealth is lying unclaimed with insurance companies, mutual funds, corporate houses, banks and the Employees’ Provident Fund Organisations.

These are investments that were made but never claimed by the owners after maturity. “The investors who put small amounts in a number of instruments often face this problem because the portfolio becomes too unwieldy and difficult to monitor,” says Sandeep Shanbhag, director at Wonderland Consultants Tax & Investment Advisory.

ET Wealth looked at the unclaimed wealth lying across various investment options. Insurance policies and long-term instruments top the list of most forgotten investments. It’s a problem that afflicts almost every investor. Every household will have a dormant bank account, or a long-forgotten insurance policy or expired dividend cheques and other unclaimed deposits like security deposits with educational institutions, Refundable securities, Fixed deposits with corporate companies – utilising the huge wealth free of interest.
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This is a major black hole when it comes to investor wealth. The life insurance industry has roughly Rs 1,724 crore unclaimed funds lying with it.Private sector insurance companies, which started operations only 11 years ago, alone have more than Rs 1,500 crore worth of unclaimed benefits.These include policy benefits paid out, but not en-cashed by, policyholders, maturity benefits lying unclaimed or death claims not filed by nominees. LIC, which has been doing business for the past six decades, stands at third place with Rs 218 crore.The public-sector behemoth has some 1.8 lakh policies for which the maturity benefits have not been claimed. Besides, there are cases where the policyholders have died but the death benefit has not been claimed.
Companies say they hold the unclaimed funds for a long time. V Srinivasan, chief financial officer at Bharti AXA Life Insurance, says, “Irda regulations don’t allow insurers to write off this money for a long time. Currently, long has not been defined.” However, you won’t get more than the due amount because it won’t earn any interest. “We don’t pay any interest because it would encourage forgetfulness by investors,” says Srinivasan.It’s best to file death claims as soon as possible. In case the policyholder dies, a delayed claim raises suspicion of foul play or fraud. The insurance company will then have to investigate the cause and circumstances of death. “It becomes a sticky issue. It’s in everybody’s interest to make the claim on time,” adds Srinivasan.

To ensure that your investment in insurance is safe, be sure to inform your family members about all the policies and keep a record. The nominee will be able to claim the amount without any hassles. However, problems crop up when no nominee is listed in the insurance document or if he has not been informed.Banks have about Rs 2,481 crore as unclaimed deposits and the government has proposed to credit unclaimed funds of more than 10 years to a new fund.“Reserve Bank of India.

(RBI) has informed that as of December 31, 2011, total amount of around Rs 2,481.40 crore in 1,12,49,844 accounts is lying as unclaimed deposits with the commercial banks,” Minister of state for finance” Namo Narain Meena had informed the Rajya Sabha in a written reply.

As the RBI and the Finance Ministry have tightened their noose around the Banks in India – why such steps are not taken to return the hard earned money of the tax payers and citizens of India by insurance companies, mutual funds, corporate houses, banks and the Employees’ Provident Fund Organisations on Similar Lines as in case of Banks.

Ashok Goyal

Hi members, I am Ashok Goyal from Rajpura - Punjab, a town near Chandigarh. I am a retired Chief Manager from a Top Nationalized Bank in India with 35 years of experience. I am the CEO-cum-Founder of this site made for Young and Old, Technical and Non Technical members to spread their knowledge across the Globe. I am a Science Graduate with an M.A. in Economics and C.A.I.I.B. (Certified Associate Life Member of Indian Institute of Banking and Finance since 1980 and a Social Worker authoring many Blogs for the benefit of the Public in General. I Graduated from Patel Memorial National College, Rajpura - 140401 and secured a Master's Degree in Economics from Punjabi University, Patiala - 147001 Punjab, India. Expert in Legal and Money Matters, may it be Banking, Investments, and Insurance or Fraud investigations. My Hobby is to share Knowledge and alarm the younger generations about the practical implications of transacting online. I am available at many Social Networking Sites. I am health conscious and like reading deeply about anything related to health and nutrition. In the case of any violation of objectionable content, the images on my authored links or on this site, you can either report me directly or you can file a DMCA complaint about the removal of the content. I do not like spammers and never hesitate to report the abuse of my profile information. I am the owner of the WQAINDIA Brand hosting self-hosted Question Answers Site at Web Question Answers. In Jan 2016, I founded Samadhan Kender at Rajpura - which is now talk of the down. In January 2017, keeping in view the Identity Crisis in India I found that the Public was facing difficulties in their CIBIL Reports - I started my best ever venture at CIBIL Consultants to solve the CIBIL Problems of the Public online. CIBIL Consultants is having its client base in all 17 states in India. © Copyright - Ashok Goyal – ALL RIGHTS RESERVED: This is my original work and I do not like any content to be copied or posted anywhere on the web or elsewhere. All the articles available on my social profiles are exclusively owned by me. If you like my articles then you can visit my articles and provide the URL as a link, without any copyright infringement, on the website or blogs which are not having any adult content related to sex, violence, hate-redness, or religious fundamentalism as per Google or Facebook TOC. DISCLAIMER: The information on this site or elsewhere - under my Profile Name is for general information purposes only. The information provided by me is simply educative to the best of my knowledge and belief. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability about the information, products, and services being displayed on this website for any purpose. Any reliance you place on such information is therefore strictly at your own risk. In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising out of or in connection with the use of this website or my profile anywhere on the web. We welcome feedback, comments or healthy criticism on any article or content on this site or my own work anywhere on the web. I owe my success on the web to IndiaStudyChannel to Tony John, Webmaster at ISC. I am also a featured author at HubPages, Global Site for writers and Authors. This site is dedicated to my countrymen to sharpen their online skills to compete for the world. The public can also get their CIBIL Reports rectified professionally at very low prices – when big corporations are charging as much as Rs.25000 per person per Credit Report.

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2 Responses

  1. Spiderman says:

    @Ibrahim Mzee Ibrahim, Please come out with your problem in details to get proper reply and guidance from experts. Alternatively you can ask your specific problem at Ask experts.

  2. Ibrahim Mzee Ibrahim says:

    Sir kindly a m looking for unclaimed funds to claim as a next of kin to share as partners if nobody applies to claim

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