New Delhi: Finance Minister Nirmala Sitharaman has called on banks and capital market institutions to ensure that all accounts have designated nominees, aiming to tackle the rising issue of unclaimed deposits and investments caused by the demise of individuals.
This statement by the Finance Minister comes four months after she proposed an initiative to address the mounting problem of unclaimed bank deposits, which has been steadily increasing year by year. As of February 2023, approximately Rs 35,000 crore in unclaimed bank deposits had been transferred to the Reserve Bank of India (RBI). In parallel, around 117 crore unclaimed shares, valued at approximately Rs 40,000 crore, are currently held by the Investor Education and Protection Fund.
Speaking at the Global Fintech Fest, Sitharaman urged the banking and market system to prioritize securing the financial future and ensuring designated beneficiaries for all accounts. She emphasized that while individuals retain the right to change their nominations as many times as they wish, it is the organization’s responsibility to verify the presence of a designated nominee.
Furthermore, the Finance Minister called upon fintech companies to take a leading role in improving the cross-border payments system, given India’s substantial market size. She highlighted the high transaction costs associated with international money transfers and cited global cross-border payments, estimated at $20 trillion, incurring transaction costs amounting to $120 billion. India, as the largest remittance recipient, received over $100 billion in remittances last year.
To enhance cross-border transactions, India has been actively advocating for information sharing on national experiences and international initiatives related to the interoperability of national fast payment systems to facilitate smooth fund transfers.
Sitharaman pointed out that the interlinkage between India’s Unified Payments Interface (UPI) and Singapore’s PayNow has already been operationalized through collaboration between the leaders of both countries. Additionally, UPI and RuPay cards are now in operation in the UAE, Nepal, and Bhutan, with discussions ongoing with other nations.
Recognizing the necessity for global cooperation in regulating cryptocurrencies, Sitharaman identified them as a potential threat to the global financial system. She stressed the importance of establishing a responsible, inclusive, resilient, and sustainable financial ecosystem through international collaboration.
Concluding her address, the Finance Minister underscored the potential for bridging the digital divide when organizations recognize the business opportunities in doing so.
