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Financial inclusion vs unclaimed deposits
Ever since the banks in India were directed to adopt strategies for reaching out to the unreached, banks have embarked upon adopting multi-channel approaches to extend banking facilities.

‘No frills account’ is an invention extensively used to increase the number of deposit accounts even without securing new deposits. Zero balance accounts were offered to bring to the banking fold the poor and illiterate folks all over the country.


Attaining financial inclusion

For reaching out to people in unbanked villages, branches are being opened by the public sector banks. During the last financial year, 3087 rural branches were opened. Branchless banking model has attracted the attention of bankers as a cost-effective means for reaching out to the unreached households.  The progress made by banks in setting up the branchless banking centres in villages through the appointment of Business Correspondents (BC) is quite impressive.  In the non-rural sector, 27,143 BCs have been appointed. The number of ATMs is on the increase in the urban sector.


Deposit mobilisation:

Mobilisation of deposits, by inculcating saving habits among the rural households, is the major component of the mechanism of financial inclusion. Extending credit facilities is the next step. The introduction to banking practices begins with the opening of savings bank deposits. Spreading financial literacy is a major task the banks have to undertake. For this purpose 718 Financial Literacy Centres have been opened  in most of the districts by the lead banks which are  taking the responsibility of  running them.

Savings bank deposits are mostly held by the salaried class and other individuals by availing themselves of the banking facilities. . The Self Help Groups (SHG) are the latest entrants into the realm of savings deposits. The number of accounts is on the increase because of the proliferation of SHGs. In fact, this is the segment where the real financial inclusion is taking place as women in groups are brought to the banking sector to become both depositors and borrowers. Schools, social clubs, professional and petty merchants also have SB accounts.


Unclaimed deposits:

With the rapid increase in the deposit accounts, the unclaimed deposit accounts also grow.  Death, migration, loss of income or loss of evidence of having an account could be the reasons. According to the Reserve Bank of India guidelines, the banks are required to display on their websites the list of unclaimed deposits and inoperative accounts with a view to enabling the public to search the list by name of the account.  

The total number of unclaimed deposit accounts with the banking sector is 112.50 lakh and the amount involved is Rs.2481.40 crore as on 31 March 2011. Around 15 years ago, the amount of unclaimed savings bank deposits was Rs.222.79 crore and the number of accounts was 96.71 lakh. (“Unclaimed Bank Deposits: Can’t rest in peace” in Industrial Economist, 30 October, 1998). Though there is an increase in the total amount, it is not alarming.

The amount involved in individual accounts being very small, the losers may be the people with  meagre incomes. It also includes small amounts of savings some SHGs have pooled together which are lying in banks as unclaimed deposits.  Gramin banks also have their own share of unclaimed deposits.  

The  list of unclaimed deposits of a gramin bank in north India, which had 19,531 such accounts, showed  that all types of depositors were listed, including primary schools, girls’ high schools, village panchayat offices, gram sarpanchs, village-level heads of small government departments, housewives and also a good number of SHGs. In a few cases, the SHGs were having more than one account. Such cases have negative implications for financial inclusion.

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