Discuss the regulatory framework governing unclaimed deposits in India. How does the UDGAM portal address the concerns of legal heirs of deceased depositors?

Q. Discuss the regulatory framework governing unclaimed deposits in India. How does the UDGAM portal address the concerns of legal heirs of deceased depositors? (15 marks, 250-350 words)

Deposits lying idle for long periods risk being permanently severed from their rightful owners. India's response rests on a statutory transfer-and-refund architecture under the Banking Regulation Act, 1949, supplemented since 2023 by a centralised digital search facility, UDGAM — a framework that is legally sound but administratively incomplete.

The regulatory framework - Statutory anchor: Section 26A, Banking Regulation Act, 1949 empowers the RBI to establish the Depositor Education and Awareness (DEA) Fund [2]. - Operative scheme: The DEA Fund Scheme, 2014 requires banks to transfer balances of savings/current accounts not operated for 10 years, and term deposits unclaimed for 10 years from maturity, to the Fund [2]. - Depositor protection built in: The transfer is not forfeiture — a depositor or heir may claim the amount with interest at any time, with no limitation period [2]. - Scale of the problem: Unclaimed amounts transferred to the DEA Fund from public sector banks stood at ₹60,518 crore (28 February 2026), alongside unclaimed insurance and mutual fund corpora [3]. - Regulator: RBI supervises commercial and co-operative banks; parallel mechanisms exist under IRDAI and SEBI [3].

How UDGAM helps legal heirs - Single-window search: Replaces bank-by-bank enquiry with one search across 30 integrated banks, covering about 90% of unclaimed deposits by value [1]. - Reduces information asymmetry: Heirs of a deceased depositor, often unaware of which bank held an account, can trace deposits using limited identifiers [1]. - Ecosystem support: Complemented by the "Your Money, Your Right" campaign and camps across 748 districts, which restituted ₹5,777 crore across 22.95 lakh claims [3]. - Limitation: UDGAM is search-only — settlement must still be pursued with the respective bank, and roughly 10% of the corpus remains outside the portal [1].

UDGAM converts a statutory safeguard into a usable citizen entitlement, shifting the disclosure burden from depositor to system. Completing bank onboarding, enabling end-to-end digital claim settlement, and building the proposed RBI–IRDAI–SEBI unified portal would extend this to all financial assets, advancing inclusive growth and the constitutional protection of property under Article 300A.

(~330 words)

Sources: 1. UDGAM Portal FAQs — Reserve Bank of India — 30 banks integrated, ~90% coverage by value, search-only nature of the portal 2. Depositor Education and Awareness (DEA) Fund Scheme FAQs — Reserve Bank of India — Section 26A statutory basis, 10-year unclaimed rule, refund with interest without time limit 3. RBI, IRDAI and SEBI Intensify Measures to Help Citizens Reclaim Unclaimed Deposits — Press Information Bureau — ₹60,518 crore DEA Fund corpus from PSBs, "Your Money, Your Right" campaign figures, multi-regulator coordination