Section 26 of the Banking Regulation Act, 1949: Return of Unclaimed Deposits

Section 26 of the Banking Regulation Act, 1949 requires every banking company to submit an annual return to the Reserve Bank of India in respect of accounts in India that have not been operated for ten years. In the case of a fixed-period deposit, the ten-year period is counted from the date on which the fixed period expires.

Current legal position: Section 26 deals with reporting of long-inoperative accounts to RBI. Section 26A separately provides for the Depositor Education and Awareness Fund. Transfer of an amount to that Fund does not extinguish the depositor's right to claim it through the bank.

What Section 26 requires

  • The return is to be furnished by every banking company to the Reserve Bank of India.
  • It must be furnished within thirty days after the close of each calendar year.
  • It covers accounts in India which have not been operated upon for ten years.
  • For money deposited for a fixed period, the ten years are reckoned from the expiry of that fixed period.
  • A regional rural bank must also furnish a copy of the return to the National Bank for Agriculture and Rural Development where the statutory requirement applies.

Section 26 - statutory text in substance

Every banking company shall, within thirty days after the close of each calendar year, submit to the Reserve Bank a return, in the prescribed form and manner, showing as at the end of that calendar year all accounts in India which have not been operated upon for ten years.

For a deposit made for a fixed period, the ten-year period is reckoned from the date on which that fixed period expires.

In the case of a regional rural bank, a copy of the return is also required to be furnished to the National Bank.

The paragraph above is a reader-friendly restatement. For authoritative statutory wording, refer to the current text of the Banking Regulation Act, 1949 on India Code.

Meaning of an unclaimed or long-inoperative deposit

For the purpose of the RBI's Depositor Education and Awareness Fund framework, amounts that remain unclaimed or accounts that remain inoperative for ten years or more may become transferable to the Fund in accordance with Section 26A of the Banking Regulation Act, 1949 and the RBI scheme and directions issued under it.

Can a depositor claim the money after ten years?

Yes. The expiry of ten years does not by itself forfeit the depositor's money. Where an eligible amount has already been transferred to the Depositor Education and Awareness Fund, the depositor, claimant or legal heir may approach the concerned bank. The bank is required to process the eligible claim and thereafter obtain reimbursement from the Fund in accordance with the RBI framework.

Section 26 and Section 26A - difference

Section 26 is primarily a reporting provision. It requires the prescribed annual return regarding accounts not operated for ten years. Section 26A establishes the Depositor Education and Awareness Fund mechanism for specified unclaimed amounts and protects the claimant's right to recover the amount through the bank.

Important historical amendments reflected in Section 26

The section has historically been amended to replace the earlier territorial wording with "in India", to omit certain words from the original provision, and to add the requirement concerning regional rural banks and the National Bank. Readers should rely on the current consolidated statutory text for legal use.

Practical steps for a depositor or legal heir

  • Contact the branch or bank where the account or deposit was maintained.
  • Provide available account or deposit details and current KYC documents.
  • For a deceased depositor, submit the documents required by the bank for settlement of deceased depositor claims.
  • If the amount has already been transferred to the DEA Fund, make the claim through the bank; the depositor does not ordinarily claim directly from RBI.
  • Use RBI's official unclaimed-deposit facilities and the bank's own unclaimed-deposit search facility where available.

Related provisions

For the statutory framework immediately surrounding Section 26, see Section 25 - Assets in India, Section 26A - Depositor Education and Awareness Fund, and Section 27 - Monthly returns and power to call for other returns and information.