The Supreme Court of India on Tuesday (March 17) sought clarification from the Union Government and the Reserve Bank of India (RBI) on why details of bank accounts held by deceased individuals are not made available to their legal heirs. The Bench, comprising Justice Vikram Nath and Justice Sandeep Mehta, was hearing a public interest litigation (PIL) filed in 2022 by financial journalist and Managing Editor of Moneylife, Sucheta Dalal, concerning unclaimed funds of investors and depositors that remain inaccessible to rightful heirs.
Supreme Court Questions Access to Unclaimed Bank Accounts
Advocate Prashant Bhushan, representing Dalal, submitted that the heirs of deceased account holders often remain unaware of unclaimed accounts and the funds lying therein. He argued that the PIL seeks directions for public disclosure of such unclaimed accounts to ensure heirs can claim their rightful amounts.
Justice Mehta raised concerns that providing account details publicly could invite fraudsters and online scammers to pose as heirs and wrongfully claim the funds.
Bhushan countered that the RBI itself has recommended the creation of a Centralised & Searchable Database to enable heirs to locate accounts of deceased parents. He further clarified that the petitioner seeks the database to include not only bank accounts but also insurance, post office accounts, and other securities, as well as welfare funds. According to the petition, the total unclaimed amount exceeds ₹1.5 lakh crore.
Petitioner Highlights Need for Centralised Database
Additional Solicitor General N. Venkataraman, appearing for the Union, highlighted the Depositor Education and Awareness Fund (DEAF), which receives unclaimed account balances after ten years and utilises them for public awareness and financial literacy initiatives. He clarified that the petitioner does not challenge the transfer of funds to these public schemes.
The ASG noted that genuine heirs can still claim the funds from the DEAF and argued that the PIL did not provide adequate data on the scale or specifics of the problem.
Court Questions Policy vs Access for Unclaimed Bank Accounts Heirs
Justice Mehta questioned how heirs can locate accounts if a deceased person held multiple accounts across different countries without completing KYC formalities. The ASG responded that such matters fall under the policy domain.
The Bench, however, noted that disclosing account information to heirs is not a policy issue, stating:
“It is not a question of policy, we are not saying the transfer is illegal. What is wrong if we give the information to the legal heirs?”
Senior Advocate Ranjith Kumar, representing the RBI, highlighted that a Central KYC system already exists. He added that banks hold funds as trustees, and they cannot release funds unless they are satisfied with the claimant, even if an indemnity bond is provided.
The Bench directed the Union and the RBI to submit detailed responses within four weeks, with the matter listed for further hearing on May 5, 2026.
Background: PIL on Unclaimed Bank Accounts Heirs
The petition requests that the Court direct the Ministry of Finance, RBI, Ministry of Corporate Affairs, and SEBI to ensure unclaimed funds transferred to government-managed schemes—such as the DEAF, Investor Education and Protection Fund (IEPF), and Senior Citizens Welfare Fund (SCWF)—are made accessible to legal heirs or nominees through a centralised online database.
The petitioner noted that funds from inoperative or dormant accounts often remain unclaimed because heirs are unaware of their existence, and banks frequently fail to inform them or track down beneficiaries.
Similarly, for the IEPF, the petition stated that technical glitches on the website prevent heirs from accessing information about deceased investors whose deposits, debentures, dividends, insurance, or post office funds have been transferred to the Fund. Consequently, heirs are often forced to engage intermediaries to claim refunds.
The PIL highlights that the IEPF’s unclaimed amounts grew from ₹400 crore in 1999 to ₹4,100 crore by March 2020, reflecting the scale of the issue. Even banks that provide some information often fail to serve the intended purpose, as heirs remain unaware of the accounts.
In light of these challenges, the petitioner proposed the development of a centralised online database under RBI control, listing deceased account holders’ details, including name, address, and last transaction date. The petition also suggested making it mandatory for banks to report inoperative or dormant accounts to the RBI.
Case Title: Sucheta Dalal v. Union of India and Ors.
Case No.: W.P. (C) No. 185/2022
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