The Insurance Regulatory and Development Authority has directed all financial institutions to deposit all amount that has not been claimed for than 10 years to the Senior Citizen Welfare Fund(SCWF) by 30 September 2017. Prior this the IRDAI (Insurance Regulatory and Development Authority of India) has made many such attempts and notifications regarding unclaimed amount. All the details will be sent to all the account holders and money will be handed over by march next year.
Senior Citizen Welfare Fund
The Senior Citizen Welfare Fund was introduced by the government with the aim of ensuring a financial reservoir fro senior citizens to ensure their welfare in their old age. The fund was introduced by Mr. Arun Jaitly and it has been decided that the fund will comprise of the unclaimed amount in PPF and EPF and is estimated to hold Rs 3000 crores under PPF and Rs 6000 crores under EPF.
Now, the Senior Citizen Welfare Act of 2015 is brought under the purview of Finance Act. It administers the unclaimed amount in PPF, EPF, small saving schemes, insurance corporations and banks. The fund was formed with the aim of ensuring social security welfare to senior citizens like healthcare, nutrition, financial security, old age homes etc. The fund is a interest bearing amount and the rate of interest is fixed by the finance ministry. The fund will be administered by the ministry of Social Justice and Empowerment.
Insurance Regulatory Body
The Insurance Regulatory Body is a statutory body with the main responsibility to mandate insurance related services. It comprises of 10 members, that is the chairman, two full and three part time members appointed by the government. The headquarter of the organisation was initially in Delhi and later moved to Hyderabad in 2001.
The Process of Crediting the Fund
Before crediting the fund with unclaimed amount lying in the accounts, each account holder shall be informed and notified by mail as well as via telephone. If a person could not be contacted for the first time then he or she will be contacted for a second time in a span of 60 days. The institutes are required to identify the unclaimed amount which are lying in the PPF, EPF, small saving accounts, insurance companies and banks without being claimed even for once in 10 years. The last date to prepare this list is set for 30 September 2017. This list will have to be displayed on the notice boards of the institutes and also on their websites for 60 days to invite claims.
Need of the Hour
The unclaimed amount in India is mandated by the Insurance Regulatory and Development Authority of India. As per the new norms set by the IRDAI all institutes with more than Rs 1000 as unclaimed amount are required to display the same on their respective websites. The institutes are also required to inform not less than twice to the account holder via mail as well as telephone within a span of 60 days.
Further if claimed the insurer will have to credit investment income to the identified unclaimed amount.