Unclaimed Deposits in the Banking System: Causes, Utilization, and Regulatory Framework

Author(s)	Dr. RAMA DEVI JOGI, Dr. USHA SRI KATHE
Country	India
Abstract	Unclaimed deposits in the banking system have emerged as a significant concern in recent years due to the growing volume of inactive and dormant accounts. These deposits arise when account holders fail to operate their accounts for a prolonged period or when funds remain unclaimed due to lack of awareness, death of the depositor, or absence of nominees. This study aims to examine the causes of unclaimed deposits, analyze how banks utilize such funds, and evaluate the regulatory framework governing them, particularly in the Indian context. The research is based on secondary data collected from Reserve Bank of India (RBI) reports, banking publications, and academic literature. The findings reveal that inadequate financial literacy, procedural complexities, and communication gaps contribute significantly to the accumulation of unclaimed deposits. The study also highlights the role of the Depositor Education and Awareness Fund (DEAF) in managing such funds. It concludes with recommendations to enhance depositor awareness, simplify claim procedures, and strengthen regulatory mechanisms to ensure efficient utilization and rightful claim settlement.
Keywords	Unclaimed Deposits, Dormant Accounts, Banking Regulation, RBI, DEAF, Financial Awareness
Field	Mathematics > Economy / Commerce
Published In	Volume 8, Issue 2, March-April 2026
Published On	2026-04-09

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