India's Unclaimed Financial Assets Surpass Rs 1.1 Lakh Crore in FY26: A Growing Concern

India's Unclaimed Financial Assets Balloon to Rs 1.1 Lakh Crore in FY26

The total unclaimed financial assets of Indians have continued to rise, reaching Rs 1.1 lakh crore in FY26, according to data provided by the government to Lok Sabha. This staggering figure is comprised of Rs 83,000 crore in unclaimed bank deposits, Rs 10,000 crore in unclaimed equities, and Rs 14,000 crore in unclaimed insurance policies.

These assets, which are currently under the control of various regulators, pose a significant challenge due to discrepancies in Know Your Customer (KYC) data. Prior to the Aadhar-PAN linkage, accounts were registered with handwritten names, minor spelling variations, or temporary addresses. As a result, when beneficiaries attempt to carry out digital KYC to withdraw funds, these discrepancies create a significant hurdle.

Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) Play Key Roles

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While the RBI keeps the unclaimed money in the Depositor Education and Awareness Fund, SEBI keeps it in the Investor Protection and Education Fund (IPEF). Market participants attribute this issue to older accounts where KYC was done manually, rather than digitally.

The issue is no longer limited to dormant accounts but has become a proof-of-entitlement issue that spans across banks, insurers, depositories, and company records. In many legacy cases, ownership may exist on paper, but claimants must prove identity continuity, succession entitlement, and document consistency across different regulatory systems. This process is particularly challenging when old records were created before standardised digital KYC, nominee updation, or PAN-Aadhaar linkage became routine.

Challenges in Claiming Unclaimed Assets

Soumya Singh, Co-Founding Partner of Thistle&Law, highlights the difficulties faced by genuine heirs in claiming these assets. "Even a minor mismatch can trigger affidavits, indemnities, NOCs, succession-related paperwork, and repeated institutional verification." Additionally, in many past cases, there were no nominee details provided, requiring a NOC from all family members to update nominee details for a deceased person and for a legal heir to claim these assets.

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Demographic Concerns Exacerbate the Issue

S.A. Karthik, Founder and Managing Partner of QL Partners, emphasizes the need for a policy to address this issue. "With a demography that will slowly but surely age, the unclaimed assets problem will only exacerbate in the near term. Over time, handwriting and therefore signatures change. It's very difficult to get biometric fingerprints of senior citizens because with age the fingers are unable to make a clear impression. Add to that rising neurodegenerative disorders like Parkinson's and Alzheimer's."

Government Efforts to Relieve the Issue

Despite relaxed procedures for beneficiaries to reclaim such assets, the total claims received have not risen significantly. The RBI recently launched a scheme providing special incentives to people who successfully claim their accounts. Last year, RBI, SEBI, and IRDAI together launched an awareness campaign "Your Money, Your Right," which covered 748 districts across the country and led to Rs 5,777 crore worth of unclaimed assets being reclaimed.

Note: The table above highlights the increasing trend of unclaimed financial assets in India.