The Reserve Bank of India on Thursday lowered the rate of interest on unclaimed deposits transferred to the Depositor Education and Awareness (DEA) fund by 50 basis points to 3.5% per annum. 1 basis point is one-hundredth of a percentage point.
In a statement the bank said, "The rate of interest has since been reviewed and it has been decided that the rate of interest payable by banks to the depositors/claimants on the unclaimed interest bearing deposit amount transferred to the Fund shall be 3.5 per cent simple interest per annum with effect from July 01, 2018".
The statement added, the settlement of all claims received by the banks on or after July 1, 2018 will be at 3.5 per cent, until further notice.
Earlier in June 2014, the central bank had notified that simple interest rate @ 4% per cent per annum will be payable by banks to depositors or claimants of these unclaimed interest bearing deposit amount transferred to the DEA Fund.
Any deposit amount left unclaimed by depositors for a period of 10 years is deemed as unclaimed deposits and such an amount is transferred to a dedicated fund for creating education and awareness. And when a customer or the depositor makes the claim against such unclaimed deposits, banks have the liability to pay back the principal amount together with the interest.