Supreme Court Seeks Clarity on Rs 1 Lakh Crore Unclaimed Funds in Banks

In Sucheta Dalal vs. Union of India, the Supreme Court has sought fresh responses from the Central government and the Reserve Bank of India on the issue of unclaimed money lying in financial accounts of deceased individuals.

The case highlights a serious concern about large sums of money remaining unclaimed due to lack of awareness among legal heirs. The Court has directed both authorities to file updated affidavits within four weeks.

The petition was filed by financial journalist Sucheta Dalal, who raised concerns over the absence of a unified system to trace such funds. It was argued that legal heirs often struggle to identify where the assets of deceased persons are held.

Advocate Prashant Bhushan, appearing for the petitioner, informed the Court that unclaimed amounts are transferred to multiple government-controlled funds. These include the Depositors Education and Awareness Fund, the Investor Education and Protection Fund, and the Senior Citizens Welfare Fund.

He submitted that these funds together hold over ₹1 lakh crore. According to him, the main issue is that families are unable to locate these assets due to the absence of a centralised database.

Bhushan further suggested the creation of a unified and searchable system that would allow legal heirs to trace such funds easily. He also proposed simplifying the process of claiming money by reducing reliance on lengthy probate procedures.

“Instead of having to file a probate etc, it can be done by saying you produce will, give indemnity, advertise. This will facilitate the heirs of dead people to claim the funds,” Bhushan submitted.

However, the Supreme Court expressed concerns regarding possible misuse of such a system. It cautioned that open access to financial data could lead to fraudulent claims.

“Opening this type of data, giving access will give rise to another set of fraudsters who will start filing claims. Have you watched the movie Housefull 4? That will happen,” the Court remarked.

The Central government, represented by Additional Solicitor General N Venkataraman, opposed the plea and stated that the matter involves policy considerations that should be left to the government.

The RBI also defended the existing framework, stating that safeguards such as KYC norms and nomination requirements are already in place. It argued that banks cannot release funds without proper verification of claimants.

The Court noted that earlier assurances regarding the creation of a centralised system had not been fulfilled. It has now asked both the Centre and RBI to clarify their stand through fresh affidavits.

The matter is scheduled to be heard next on May 5.