Unclaimed term deposits in scheduled commercial banks and co-operative banks will now attract rates of interest applicable to savings accounts or the contracted interest on the matured deposit, whichever is lower.
The Reserve Bank has tweaked the rules on applicable interest on unclaimed term deposits. Earlier, the unclaimed term deposits attracted a rate of interest as applicable to savings accounts.
A co-operative bank official said a lot of people take short-term deposits with a tenure of 7-21 days where the interest rate is lower than the savings account rates. For such unclaimed deposits, as per the earlier norm, the banks had to pay a higher interest and the new RBI rules fixes this anomaly, he added.
The official explained that RBI classifies a deposit as unclaimed when no transaction is made in the account for 10 years or more.
Such unclaimed amounts have to be transferred to RBI’s Depositor Education and Awareness (DEA) Fund every month. In case after 10 years, if an authentic claim on the deposit is made, we settle it from our own funds and claim it back from the DEA Fund, the official said .