Reserve bank to set up depositor education and awareness fund

Invites comments on this scheme from all stakeholders, which should reach the central bank by February 5 The Reserve Bank of India (RBI), on Tuesday, said that it would establish a fund to be called ‘Depositor Education and Awareness Fund’, which would comprise unclaimed funds of depositors. “Pursuant to the amendment of The Banking Laws (Amendment) Act, 2012, Section 26A has been inserted in the Banking Regulation Act, 1949, that empowers the Reserve Bank to establish a fund called Depositor Education and Awareness Fund,” said the RBI in a release, while issuing the draft of the scheme. The RBI also invited comments on this scheme from all stakeholders, which should reach the central bank by February 5. The Fund will be created by taking over inoperative deposit accounts which have not been claimed or operated for ten years or more or any deposit or any amount remaining unclaimed for more than 10 years within three months from the expiry of the period of ten years. “The Fund would be utilised for promotion of depositors’ interest and for such other purposes which may be necessary for the promotion of depositors’ interests as specified by the Reserve Bank from time to time,” the RBI added. The depositor would, however, be entitled to claim from the bank his deposit or operate his account after the expiry of ten years, even after the unclaimed deposit funds have been transferred to the Fund. The bank would be liable to pay the deposit amount to the depositor and claim refund of such amount from the Fund. The RBI also said that it would appoint an authority or a committee to administer the Fund, and to maintain separate accounts and other relevant records in relation to the Fund, which would be specified by it. Source: Education News