Tuesday, February 3, 2015

DEAF Scheme

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There are several accounts in banks which are not operated for 10 years (or more), or there are deposits which are unclaimed for 10 years (or more). There is little possibility that the deposits will be reclaimed by the owner (as it is unclaimed for that long period).

RBI decided to acquire those unclaimed amounts and create a fund, which could be used for the good of the public. It amended the Banking Regulation Act, 1949, by adding Section 26A, which empowers RBI to establish the Depositor Education and Awareness Fund (DEAF).

All the unclaimed amounts in the banks need to be transferred within 3 months after becoming 10 years default, to the DEAF fund. Also note that the transfer is allowed only in electronic mode.

The goal of this DEAF fund is to promote depositor interest, like educating them, or creating awareness among them, or some other purpose.

Situational Question
If someone comes to your bank and claims for his/her deposit (which has already been transferred to DEAF fund, because it defaulted for 10 years), what will you do?

You will verify his/her claim, and after successful verification, will honor the claim.

Note that the bank would be liable to pay the amount to the depositor/claimant and claim refund of such amount from the DEAF fund (even after 10 years).

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Happy learning!

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