Finance Minister Nirmala Sitharaman has urged key financial regulators—including the RBI, SEBI, IRDAI, and PFRDA—to accelerate the refund process for unclaimed deposits and enforce a unified, simplified KYC framework across all financial services.

In her address at the 29th meeting of the Financial Stability and Development Council (FSDC) held yesterday, Sitharaman emphasized the need to safeguard the interests of ordinary citizens by ensuring they can quickly reclaim forgotten funds tied up in banks, insurance schemes, mutual funds, pension accounts, and other financial products.

Unclaimed deposits—ranging from idle bank accounts and matured fixed deposits to unpaid dividends and lapsed insurance policies—have ballooned to substantial sums. Banks reported roughly ₹78,213 crore in such deposits by March 2024, a 26% increase over the previous year. The Depositor Education and Awareness Fund (DEAF) alone held ₹62,225 crore as of March 2023. Sitharaman warned that while some claims may involve complex inheritance legalities, the system must still be expedited and made more customer‑friendly.

To tackle the backlog, the FSDC proposed district-level camps where regulators and banks proactively reach out to claimants—especially those with verified nominee information. The Finance Ministry confirmed a combined effort involving RBI, SEBI, MCA, PFRDA, and IRDAI, working with pensions, insurance, mutual funds, and banking entities.

The Finance Minister also framed the establishment of standardized, digital-first KYC procedures as a national priority. Presently, banks, insurers, pension funds, and mutual fund houses maintain varied KYC protocols, often creating bottlenecks during claims and onboarding. Sitharaman urged regulators to converge on a “single, seamless” KYC system, benefitting not just domestic users but also NRIs, PIOs, and OCIs. Beyond claims and KYC, the FSDC delved into broader themes of macrofinancial stability: streamlining compliance burdens, strengthening cyber resilience, boosting account aggregator networks, expanding factoring services, and ensuring robust regulatory oversight.

Among the initiatives: roll out of a centralized KYC module; fast-track refunds through on‑site district camps; more efficient coordination among regulators; and enhanced cybersecurity protocols in finance. By setting time-bound targets and mandating regular progress reviews, Sitharaman signaled a commitment to operationalizing these reforms. The FSDC meeting concluded with instructions to report back in June–July on outcomes and pending actions. Citizens stand to benefit from more timely reclaiming of dormant assets and smoother digital onboarding. The unified KYC system also supports broader financial inclusion goals and a more resilient, user‑centric financial ecosystem.

Finance Minister Nirmala Sitharaman’s clarion call to fast-track unclaimed deposit refunds and unify KYC processes could unlock tens of thousands of crores in dormant assets, streamline customer experience, and solidify India’s digital and regulatory infrastructure.