Companies are required to transfer such unclaimed amounts to IEPF, administered by the IEPF Authority (IEPFA), if they could not identify the rightful owners for seven years. IEPFA is attached to the ministry of corporate affairs.
The government has been trying to make the process easier for beneficiaries to claim such amounts and to streamline the refund process, but the flow of funds into IEPF has been going up every year, leading to an increase in the size of the fund even after making refunds and returning shares, the first of the two persons cited earlier said, both of whom spoke on the condition of anonymity.
“The ministry of corporate affairs will, therefore, engage closely with companies and registrar and transfer agents (RTAs) to make sure that beneficiaries are identified at their level itself and the flow of such amounts to IEPF comes down,” said this person.
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RTAs are entities that handle shareholder records for companies.
Queries emailed to the ministry of corporate affairs and to IEPF Authority (IEPFA) on 11 April seeking comments for the story remained unanswered till press time.
As per figures available from the ministry, at the end of FY24, over ₹8,100 crore of unclaimed dividend, interest on bonds and other unclaimed investments was lying with IEPF, up from over ₹5,700 crore at the end of FY23.
In FY24, the authorities approved over 16,900 claims from beneficiaries and in FY25 up to 15 March, over 12,200 claims were approved, finance and corporate affairs minister Nirmala Sitharaman informed Rajya Sabha on 1 April. Industry estimates suggest the value of shares lying with IEPF could be worth much more, possibly, over ₹50,000 crore.
However, lack of awareness among potential beneficiaries about their entitlements, absence of familiarity about the process of filing claims and difficulties in establishing the identity have been factors slowing down the refund.
Transferring unclaimed shares, dividends, or investor claims to IEPF should be seen not just as compliance by businesses, but as a step towards responsible financial management and investor protection, Amit Maheshwari, tax partner at AKM Global, a tax and consulting firm, said.
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Setting up an end-to-end communication channel and close collaboration with all stakeholders—investors, banks, financial institutions, RTAs and regulatory bodies—would support accurate and efficient cross-checking of stakeholder data, which will also help in keeping shareholder information updated, said Maheshwari.
To streamline the refund of these assets and shares from IEPF, Sitharaman in 2023 announced that an integrated IT portal would be set up.
A society set up under the Ministry of Electronics & IT (MeitY), Bhaskaracharya National Institute for Space Applications and Geoinformatics, is building this portal which is expected to bring together claimants, companies, depositories and the Centre’s Public Financial Management System that manages flow of public funds.
“While companies do put out public notices for such claims, simplification of claim processes, dedicated Investor awareness campaigns by companies and the government can further ensure unclaimed assets are returned efficiently,” added Maheshwari.
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The strong technology network in India can be leveraged to identify rightful owners and process the claims faster and efficiently by all companies, Maheshwari said, referring to a tie-up that capital market regulator Sebi announced last month with DigiLocker, a citizen’s digital document wallet facility by MeitY, for facilitating seamless access to financial records and to minimize unclaimed assets.
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