Page 51 - Banking Finance April 2022

FEATURE

nomination or without being a joint account with ‘either or interest, must cooperate with banks. It is heartening to
survivor’ option. This arises mostly due to ignorance of the note that positive shifts are taking place in this respect,
account holder while opening the account, or even if she especially after the banks’ intensified use of mobiles and
comes to know afterwards, does not carry out the necessary Internet.
modifications. In the case of such accounts, banks are
required to follow the legal procedures before handing over Unclaimed deposits may constitute a minuscule proportion
the money to the legal heirs. of total deposits of a bank, but since banks, especially PSBs
serve the ‘small’ depositors, they need to take initiatives for
Therefore, the onus lies with the deceased depositor’s legal reducing the incidence of unclaimed accounts. Some of the
heirs who have to initiate the process with the bank. initiatives that could be taken up are:
However, as widely known, legal procedures are (i) Organising area-wise special camps for revival or
cumbersome and consume considerable time. disposal of unclaimed accounts.

Financial illiteracy and lack of awareness about the (ii) Monitoring the position of unclaimed deposits in
procedures among the people lead to these kinds of customer grievance redressal meetings at various levels.
situations. Therefore, financial literacy drive is welcome. (iii) Business Correspondents can help establish contact with
the holders of inoperative accounts or their legal heirs
Possible solutions and reactivate the accounts.

While opening accounts, banks need to see that customers
There is always room to progressively simplify the legal
fill in the nomination part in account opening forms
procedures for settlement of the unclaimed accounts,
appropriately and completely. Customers, in their own
especially for those with low amounts.
The RBI has been doing a good job in persuading banks to
reduce the incidence of unclaimed deposits. However, a few
more things, as mentioned below, may be added:
(i) Asking banks to report the unclaimed deposits data
population group-wise (i.e., rural/semi-urban/urban/
metro) so that the issue can be tackled more effectively.

(ii) Commenting upon the position of unclaimed deposits
while carrying out on-site inspections of banks.

It is only through meaningful cooperation between banks
and customers that the incidence of unclaimed deposits can
be minimised. (Source: Business Line)

Bank of India to launch digital lending platform

Bank of India plans to put in place a mobile-based lending platform to grow its RAM (retail, agriculture and micro,
small & medium enterprises) portfolio from about 54% of total domestic loans to 65 % in two years. The bank is
developing a tech-stack for enhancing its digital banking presence, according to PR Rajagopal, Executive Director.
Referring to many banks having more than 60 % of total domestic advances in the RAM segment, he observed that
digital lending will help re-balance BoI's portfolio composition towards RAM advances. "Our RAM portfolio is hover-
ing around 54 %. So, we need a very strong digital push to grow this portfolio.
"We will launch a super app by the second quarter of FY23. Vendors have been on-boarded to build the app," Rajagopal
said. The app will ensure that the public sector bank can digitise loan sourcing, give in-principle sanctions to custom-
ers, and cross-sell non-banking financial services products.

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