Unclaimed Financial Assets Worth Rs. 1.82 Lakh Crore Could Boost Consumption, Say Experts

The government kick-started the campaign ‘Aapki Punji, Aapka Adhikar’ recently from Gandhinagar, the state capital of Gujarat. Money was handed over to heirs of many people who had insurance policies as well as those who had money lying in bank accounts, mutual funds or stocks.

“To term these persons as beneficiaries would be erroneous. They are the rightful claimants. Their fathers, husbands or brothers had saved their hard-earned money. It is their right,” said union Finance Minister Nirmala Sitharaman, while addressing the officials of banks, insurance and mutual fund companies, Ministry of Corporate Affairs, equity market regulator the Securities and Exchange Board of India (SEBI) and insurance sector watchdog Insurance Regulatory Development Authority (IRDA) among others.

The minister said that the focus is on three ‘A’s – Awareness, Accessibility and Action. She urged the officials to take the campaign into the villages and locate the rightful claimants. 

Experts Welcome Move

Rajendra Shah, committee member of Gujarat Investor Shareholder Association (GISA) welcomed the move saying that investors or their family members severely lack the idea and the means to recover their assets and the move by the government is well-placed.

“Many investors have left country, some have lost the documents, and there are cases of change in address. So, their money lies invested without any use. There are cases where people have invested but had not shared the details with family members. After their death, their relatives have no clue about the investment. Some have saved it for their old age, but not disclosed to their children, but they pass away. Many have died during COVID-19. We get close to 70-80 cases every year, but this is just a tip of the iceberg,” said Shah.

Stakeholders in the economy have welcomed the initiative and they hope that the move can pour considerable disposable cash in the economy.

“Unclaimed deposits represent a quantity of resources that are lying idle with financial institutions that are neither being used for consumption nor used for lending/investments. The challenge is to locate the owners of these funds and have them claim the same. These funds would then be used for either consumption or savings. Given that the propensity to save is around 30%, we can expect around 70% to be spent which will help boost demand. Banks have been on the job trying to locate these owners and encouraging them to claim the same. This is an ongoing process,” said Madan Sabnavis, Chief Economist at Bank of Baroda.

Talking to The Secretariat, Rajesh Rokde, chairman of Gems and Jewellery Domestic Council (GJC) termed the campaign as praiseworthy. “This money is lying unused. If it goes to the real owner, it will give a boost to the economy. Enabling the heirs get the money is a really good move,” said Rokde.

Infusing Liquidity

This is one of the series of moves by the Central government to infuse liquidity into the Indian market, which has become sluggish of late. Earlier the union budget increased the limit for Income Tax, the Monitory Policy Committee (MPC) reduced interest rates by 50 basis points and the recent rejig in the GST regime is expected to infuse close to two lakh crore rupees in the system.

Economist and former principal of H K Arts College Ahmedabad Prof. Hemantkumar Shah said, “While the amount lying in savings account in banks would be nominal, the real impact would be the release of money lying in insurance policies, mutual funds and stocks. That could bring significant cash in the hands of respective owners."

Breakdown Of The Assets

•     Banks: Rs. 75,000 crore
•     Insurance: Rs. 14,000 crore
•     Mutual Funds: Rs. 3000 crore
•     Companies: Rs. 9000 crore
•     Stock market: Rs. 90,000 crore