BackAI and blockchain solutions for unclaimed asset recovery, says Vikash Kumar Jain of Share Samadhan
The latest data indicates that unclaimed deposits and investments in India, including mutual funds, shares, and debentures, amount to several thousand crores of rupees
PremiumBlockchain can provide a transparent mechanism for tracking ownership and automating transfers of unclaimed assets through smart identification of claimants, said Vikash Kumar Jain, Co-Founder & Director, Share Samadhan.
In an interview with MintGenie, Jain said that securities may lie unclaimed due to lack of awareness, change of address, failure to update contact information, death of the shareholder with uninformed heirs, lost documentation, and inactive accounts.
Edited Excerpts:
What are unclaimed shares and dividends?
Unclaimed shares and dividends are equity shares and their payouts that have not been claimed by their rightful owners even after the declaration of a dividend. Reasons include lack of awareness, outdated contact information, or heirs being unaware of investments. These shares and dividends if unclaimed for seven years or more are accumulated and transferred to the IEPF Authority as per regulatory requirements.
What are the reasons for these securities lying unclaimed?
Securities may lie unclaimed due to lack of awareness, change of address, failure to update contact information, death of the shareholder with uninformed heirs, lost documentation, and inactive accounts. These factors contribute to shareholders losing track of their investments, resulting in unclaimed assets.
Also Read: How to claim unclaimed deposits and investments? A step-by-step guide
Could you demonstrate how unclaimed investment identification and claims could be made easier using contemporary technologies like blockchain or artificial intelligence?
Blockchain can provide a transparent mechanism for tracking ownership and automating transfers of unclaimed assets through smart identification of claimants. Artificial Intelligence can analyze data to detect unclaimed investments and match them with potential owners by cross-referencing sources like death records and address changes. These technologies can streamline and secure the identification and claims process.
What part, in your opinion, do organizations such as yours and financial advisors have in assisting clients in managing and recovering their unclaimed investments?
Organizations like Share Samadhan and financial advisors play a key role by educating clients, providing end-to-end support services, and maintaining proactive communication with Registrars, Companies, and Authorities. They help in professionally managing the entire paperwork along with legal documentation and follow up with various authorities to assist the investor with the claims process.
Also Read: RBI’s Udgam portal: How to check details of unclaimed deposits? A step-by-step guide
What proactive measures can be taken to reduce these risks and how might changes in personal circumstances, such as marriage, migration, or work changes, contribute to the problem of unclaimed investments?
Proactive measures include regularly updating contact information, consolidating accounts, financial planning, and robust notification systems. Personal changes like marriage, migration, or job changes often lead to address updates that, if not communicated, result in unclaimed investments. Timely updates and proactive financial management can mitigate these risks.
Would you please provide the most recent estimate of the amount of unclaimed deposits and investments in India, including mutual funds, shares, and debentures?
The latest data indicates that unclaimed deposits and investments in India, including mutual funds, shares, and debentures, amount to several thousand crores of rupees.
Regulatory authorities like SEBI and RBI periodically update these figures, highlighting the significant volume of unclaimed assets in the country. If we talk about an estimate of some of the amount of unclaimed investment in various asset classes, shares transferred to IEPF amount to ₹29,000 crores, mutual funds to ₹24000 crores, PPF to ₹48000 crores, bank accounts to ₹26000 crores, etc.
What is the cause of India's extraordinarily high rate of unclaimed investments and deposits?
India's high rate of unclaimed investments and deposits is due to a lack of financial literacy, inefficient record-keeping, high demographic mobility, inheritance issues, and regulatory gaps. There is a need to increase financial literacy and investor awareness to keep financial record updates. Addressing these issues with better education, communication, and technological solutions can help reduce unclaimed investments, and ensure rightful owners reclaim their assets.
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