MUMBAI: Finance minister Nirmala Sitharaman has urged banks and capital market institutions to ensure all accounts have a nomination to address concerns over rising unclaimed deposits and investments due to death of individuals. The FM’s statement comes four months after she proposed a drive to settle unclaimed bank deposits, which have been steadily increasing every year.
As of February 2023, about Rs 35,000 crore of unclaimed bank deposits were transferred to RBI. Similarly, around 117 crore unclaimed shares — estimated to be worth around Rs 40,000 crore — are held by the Investor Education and Protection Fund.
“I want the banking and market system to remember that when handling finances, organisations should consider the future and ensure there are designated beneficiaries,” Sitharaman said at the Global Fintech Fest here on Tuesday.
“Of course, individuals can change their nominations any number of times. However, it is the responsibility of the organisation to ensure that a designated nominee is in place,” she added. She also suggested that startups could assist the government in this area.
Sitharaman asked fintech companies to take a leading role in the cross-border payments system, given the size of India’s market. She noted the high transaction charges incurred when sending money across borders.
“Global cross-border payments are estimated to be around $20 trillion, incurring transaction costs of $120 billion. India, being the largest remittance receiver, received over $100 billion last year. The significant remittances have motivated our efforts to enhance cross-border payments, a priority in G20 areas,” Sitharaman said.The FM noted that to improve cross-border transactions, India has been advocating for information sharing on national experiences and international initiatives related to the interoperability of national fast payment systems to ensure smooth flow of funds.“The interlinkage between UPI and Singapore’s PayNow was put into operation by the PMs of both countries. UPI and RuPay cards are now operational in the UAE, Nepal, and Bhutan, and discussions are on with other countries,” she said.
The FM noted the need for global cooperation in establishing a responsible financial ecosystem that is inclusive, resilient, and sustainable. She identified cryptocurrencies as a potential threat to the global financial system and emphasised on the necessity for global cooperation in their regulation.
She said that the digital divide can be bridged when organisations recognise a business opportunity.