All the banks are advised to calculate the interest payable on interest bearing deposits transferred to RBI at the rate of 3 percent per year with effect from May 11, 2021 till the time of payment to the depositor/claimant. The interest rate was 4 per cent p.a. up to June 30, 2018, and 3.5 per cent w.e.f. July 1, 2018. On a review of July 2nd 2021 banks are advised by the RBI to pay interest if a term Deposit matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract rate of interest as applicable to savings deposits. In case of cooperative banks interest rate applicable to SB accounts or the contracted rate of interest on the matured TD, whichever is lower.
Section 26 of the Banking Regulation Act, 1949 provides, inter alia, that every banking company shall, within 30 days after close of each calendar year submit a return in the prescribed form and manner to the Reserve Bank of India as at the end of each calendar year (i.e., 31st December) of all accounts in India which have not been operated upon for 10 years. Banks have to move the unclaimed money lying in their inoperative accounts to RBI’s Depositors Education and Awareness Fund. As on 31 March 2019, close to ₹25,000 crore was lying in Depositors Education and Awareness Fund (DEAF). The money so received by RBI on account of unclaimed deposits invested in instruments such as government securities by a committee set up by the RBI.The income thus earned is used for paying interest on the deposits as well as using it for investor awareness and education purposes.The RBI pays an interest on the deposited amount, which it keeps revising from time to time. According to the regulations, the account depositors or their legal heirs can claim the money at any time by simply furnishing the necessary documents to the bank.The RBI returns the deposit money and pays an interest on the deposited amount, which it keeps revising from time to time.