Monday, 22 Dec, 2025
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Returning funds is welcome but remedial. Without better tracking, regular alerts, and simpler claims, unclaimed deposits will keep rising—awareness campaigns cannot replace structural fixes
When Prime Minister Narendra Modi said on December 10 that nearly Rs 2,000 crore had been returned to rightful owners under the Centre’s Your Money, Your Right initiative, the figure sounded reassuring. It showed that the system can work when nudged. But the larger number lurking behind it tells a more sobering story. The amount returned represents barely 3 per cent of India’s unclaimed bank deposits as of June 30, 2025.
Those deposits have ballooned. From Rs 27,824 crore at the end of FY21, unclaimed balances have more than doubled to Rs 67,004 crore in just four years. That is not a marginal accounting issue. It reflects a persistent failure of information flows, estate planning, and banking outreach in a country where financial inclusion is often discussed more in terms of opening accounts than maintaining them.
The government’s three-month campaign, launched in October by finance minister Nirmala Sitharaman, was designed to make it easier for depositors and heirs to reclaim forgotten money. It has had some success, but the scale of the problem dwarfs the recovery. If anything, the data suggests that unclaimed deposits are rising faster than the system’s ability to return them.
One reason is the concentration of these deposits. Public-sector banks account for over four-fifths of the total, and their share has steadily increased—from 85 per cent in FY21 to over 87 per cent by June 2025. This dominance partly reflects history. Public banks have older customer bases, legacy accounts, and deeper penetration in rural and semi-urban India, where record-keeping and succession planning are weaker.
State Bank of India alone holds Rs 19,330 crore in unclaimed deposits, roughly one-third of the total. Among other public banks, Punjab National Bank, Canara Bank, Bank of Baroda and Union Bank of India together account for another large chunk. This concentration is not accidental. These banks inherited decades of accounts opened when digital records were limited and customer engagement minimal.
Private banks tell a slightly different story. Their share of unclaimed deposits has fallen to under 13 per cent. Even so, the absolute numbers are not trivial. ICICI Bank leads the private sector with over Rs 2,000 crore in unclaimed deposits, followed by HDFC Bank, Axis Bank and Kotak Mahindra Bank. Faster digitisation and better customer tracking may be slowing the build-up, but they have not eliminated it.
The definition of “unclaimed” itself is revealing. Savings and current accounts that have seen no activity for 10 years, and fixed deposits unclaimed for a decade after maturity, fall into this category. In a country with low levels of financial literacy, frequent migration, and weak inheritance documentation, such dormancy is hardly surprising.
What is striking is how passive the system has been until recently. Banks transfer unclaimed balances to a central pool, where the money remains available to claim but largely invisible to those entitled to it. For many families, especially after the death of an account holder, the trail simply goes cold.
The recent push to return money is welcome, but it is remedial, not preventive. Unless banks redesign how they track inactive accounts, regularly alert customers and nominees, and simplify claim procedures, the stock of unclaimed deposits will keep growing. Awareness campaigns help, but they cannot substitute for structural fixes.
There is also a policy irony here. India has invested heavily in financial inclusion—Jan Dhan accounts, direct benefit transfers, digital payments. Yet the swelling pile of unclaimed deposits suggests that inclusion without continuity can create its own inefficiencies.
Returning Rs 2,000 crore is progress. But the real test is whether the flow of new unclaimed deposits can be slowed. Otherwise, the headline numbers will keep rising, and recovery drives will remain exercises in damage control rather than proof of a system that works by default.
