RBI sets targets for lenders on CBDC, unclaimed deposits
2 min read 31 Jul 2023, 12:27 AM ISTBankers said the regulator is constantly monitoring actions of lenders to meet the targets
PremiumThe Reserve Bank of India (RBI) has taken a cue from the finance ministry, implementing a system of assigning business targets to banks for promoting initiatives like the central bank digital currency and the recovery of unclaimed deposits.
Bankers said the regulator is constantly monitoring actions of lenders to meet the targets. For instance, RBI has given a target to generate one million daily digital currency transactions by December, despite bankers’ saying benefits of the central bank digital currency is limited, considering the popularity of the Unified Payments Interface (UPI) platform.
RBI deputy governor T. Rabi Sankar recently asked banks to prepare for one million transactions a day for CBDC by the end of the year, Mint reported on 12 July. This will give RBI enough data to study the impact of CBDC on the financial system, said Shankar.
As of 30 June, more than a million users as well as 262,000 merchants had registered for the pilot on retail CBDC transactions.
The regulator is also following up on the progress in the “100 Days 100 Pays" campaign, under which banks must trace and settle the top 100 unclaimed deposits of every bank in every district. The scheme launched in June and is expected to end on 8 September. “RBI has become like the finance ministry," a senior official of a public sector bank said, seeking anonymity. “They are constantly following up with us. Executive directors of banks have to give an update to RBI on the progress made on unclaimed deposits," the official added.
The balance in savings or current accounts not operated for 10 years and term deposits not claimed for 10 years from the date of maturity are classified by banks as unclaimed deposits. These amounts are transferred to the depositor education and awareness (DEA) fund maintained by RBI.
According to Union minister of state for finance Bhagwat Kishanrao Karad, private and public sector banks transferred unclaimed deposits of a whopping ₹1.44 trillion to the DEA fund. While private sector banks transferred ₹21,315 crore between 31 March 2019 and 31 March 2023, PSBs have transferred ₹1.22 trillion.
Banks have received ₹5,729 crore from the DEA fund in the last five years as a refund for settling unclaimed deposits.“RBI is monitoring unclaimed deposits aggressively because the money is going to DEA. They hold meetings with bankers regularly to exchange ideas and intensify efforts to settle the deposits," said another senior private sector banker. “There is a huge amount of pressure as we have to put a lot of feet on the street to get it done." he added.
Separately, the central bank has also announced the setting up of a centralized portal for the public to help them locate unclaimed deposits in multiple banks.
