New Delhi: The Supreme Court has issued clear directions to the Central Government and the Reserve Bank of India (RBI) to establish a robust and standardized policy ensuring that information regarding abandoned bank accounts of deceased account holders reaches their legal heirs promptly. The Court noted that under the existing system, if a person holds multiple bank accounts and dies intestate, heirs often have no way of knowing about these accounts, creating significant difficulties in accessing the funds.
Gaps in Existing System Highlighted
The bench of Justices Vikram Nath and Sandeep Mehta delivered this directive during the hearing of a public interest litigation (PIL). The petition highlighted that there is currently no uniform mechanism to ensure that deposits of deceased account holders reach the rightful heirs. The Court clarified that its focus is not on fund transfer itself, but on providing timely account information so that legal heirs can claim their rightful deposits.
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DEAF Fund and Growing Unclaimed Deposits
The Supreme Court also directed the Centre and RBI to file a response affidavit and adjourned the matter for further hearing on May 5. During proceedings, the Additional Solicitor General explained that if a genuine heir is identified, the amount is returned to them through the Depositor Education and Awareness Fund (DEAF). Established in 2014, this fund holds unclaimed deposits from banks until rightful claimants come forward.
The petition informed the Court that as of March 2021, DEAF held over ₹39,264 crore, a figure that has steadily increased over the years, highlighting the growing scale of abandoned accounts. The Court emphasized that timely policy formulation and system improvements will not only benefit heirs but also enhance transparency in the banking system.
Commenting on the Supreme Court’s initiative, renowned cybercrime expert and former IPS officer Prof. Triveni Singh said,
“Failure to provide information on abandoned accounts to heirs causes financial loss and erodes trust in digital and banking transactions. The Government and RBI must implement a standardized process immediately to ensure that real heirs receive timely information and access to their funds.”
Experts Call for Immediate System Reforms
Experts warn that the current situation poses serious economic and legal challenges. Delays in providing account information impact the rights of genuine heirs and result in prolonged retention of large sums in the fund, exerting additional pressure on banking operations. The Supreme Court’s intervention signals a high-priority approach to ensure accountability and timely action in such cases.
Court Seeks Response From Centre and RBI
The Court directed that the Centre and RBI jointly establish a mechanism where, upon the death of an account holder, heirs are promptly informed and funds are securely transferred. Such a process is expected to reduce disputes while reinforcing public confidence in the banking system.
Overall, the Supreme Court’s ruling provides clear guidance on managing abandoned bank accounts. Establishing a structured policy and ensuring accountability will help prevent financial disputes, protect rightful heirs, and streamline access to unclaimed funds in the future.
