Unclaimed Bank Deposits in India: Supreme Court's 2026 Ruling and Rights of Legal Heirs

Over one lakh crore rupees is estimated to lie unclaimed in Indian bank accounts, insurance policies, and post office funds, most of it belonging to deceased account holders whose legal heirs are unaware of these assets. This systemic failure in India's financial system has prompted the Supreme Court of India to intervene, directing the Centre and the Reserve Bank of India to formulate a comprehensive policy to ensure that families of deceased depositors can be informed about and access these funds. Understanding the legal framework around unclaimed deposits, what the Supreme Court has directed, and what legal heirs can do is critical knowledge for families navigating the aftermath of a death.

What Are Unclaimed Deposits?

Under RBI regulations, a savings or current account is classified as inoperative or dormant if there have been no customer-induced transactions for more than two years. If such an account remains inactive for ten years, the balance is transferred to the Depositor Education and Awareness (DEA) Fund, maintained by the RBI. Similarly, unclaimed amounts from matured insurance policies, fixed deposits, and recurring deposits follow their own rules before being classified as unclaimed. The DEA Fund is intended to use these amounts for the education and awareness of depositors, but crucially, legal heirs retain their right to claim these amounts even after the transfer to the Fund.

The Scale of the Problem

The scale of unclaimed deposits in India is staggering. As of recent estimates, the DEA Fund alone holds tens of thousands of crores of rupees. The problem is compounded by the fact that there is no centralised registry through which legal heirs can check whether a deceased family member held accounts across different banks or financial institutions. A family may be unaware that the deceased held accounts at multiple banks, had a small insurance policy, or had a recurring deposit that matured years ago. This information gap is the core problem the Supreme Court has identified, and it is not a gap that can be filled by individual effort alone.

The Supreme Court's 2026 Intervention

A bench of Justices Vikram Nath and Sandeep Mehta, hearing a PIL in March 2026, questioned why details of bank accounts belonging to deceased persons cannot be proactively disclosed to legal heirs. The Court noted that the focus should not only be on preventing fraud but on ensuring that rightful heirs are informed of what they are entitled to. The Court directed the Centre and the RBI to file a response affidavit on what steps have been taken to create a centralised tracking system and what policy framework exists to notify legal heirs. The matter is listed for further hearing on May 5, 2026. The Court's intervention has catalysed a broader policy discussion about building a unified digital inheritance system.

Current Legal Framework for Claims

Legal heirs wishing to claim unclaimed deposits must approach the relevant bank or financial institution with proof of death (a death certificate) and proof of their status as legal heirs (a succession certificate, legal heir certificate, or will with probate, depending on the amount and the institution's requirements). For amounts transferred to the DEA Fund, claims are still filed with the original bank, which then claims the amount back from the RBI on behalf of the legal heir. Banks are required by the RBI to display on their websites the details of unclaimed accounts of deceased depositors. The Central Government's UDGAM portal (Unclaimed Deposits Gateway to Access inforMation) was launched to allow citizens to search for unclaimed accounts across major participating banks.

What Legal Heirs Should Do

Legal heirs who suspect a deceased family member had bank accounts, insurance policies, or other financial assets should begin by searching on the UDGAM portal, which aggregates unclaimed deposit data from major banks. For life insurance, IRDAI has a similar portal. For mutual funds, SEBI has a system for reporting unclaimed amounts. If accounts are located, the claim process requires documentation of the claimant's identity and their relationship to the deceased. For amounts above certain thresholds, a succession certificate from a civil court is often required, which involves filing a petition under the Indian Succession Act, 1925, before the appropriate civil court.

Practical Takeaways

Every family should maintain a record of the financial accounts held by members, including bank accounts, insurance policies, demat accounts, and provident fund balances. Nomination of beneficiaries for all financial accounts significantly simplifies the claim process for heirs and should not be deferred. Where no nomination exists, a succession certificate is often the most reliable legal instrument for establishing a claimant's rights. The Supreme Court's 2026 intervention is likely to result in stronger RBI directives on proactive disclosure to legal heirs. The right to claim unclaimed deposits does not expire even when funds are transferred to the DEA Fund, making it important for families to act even years after a member's death if they discover previously unknown assets.