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Is Depository Education and Awareness Fund Serving Its Purpose?

Mr. C.S. Sudheer | Updated On Wednesday, June 08,2016, 06:21 PM
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Is Depository Education and Awareness Fund Serving Its Purpose?

 

There is a famous saying “An investment in knowledge pays the best interest”. You want to save your money, protect it and invest it? You need financial awareness, education and knowledge. What happens if you are not financially educated? You could become a victim of fraudsters and conmen. They would disappear in no time, along with your money. You also lose out on the opportunity to make a good investment, all because you are not financially literate. RBI, the Central bank of the country, knows this all too well and started what was the Depositor Education and Awareness Fund Scheme, 2014, way back in the year 2014. So what is the Depository Education and Awareness Fund, popularly called DEAF?

What is the Depository Education and Awareness Fund?

All banks in the country have to transfer money lying in bank accounts, which have been inoperative for at least 10 years, to the Depository Education and Awareness Fund. If you have a savings bank account, fixed deposit, recurring deposit, current deposit account, demand drafts, pay orders, bankers cheques, which have been inoperative (not used) for more than 10 years, then the money in these accounts, will be transferred to the Depository Education and Awareness Fund. Has your fixed deposit been declared inoperative and money in it transferred to the Depositor Education and Awareness Fund? Worry not. Banks are required to display on their websites and at their branches, the ways in which you (customer) can get your money back from the Depository Education and Awareness Fund. If your bank finds your claim to be genuine, it will ask the Depository Education and Awareness Fund to refund your money. The bank will then wait until the money is transferred to your account, from the Depository Education and Awareness Fund. Your name will then be deleted from the banks list.

What happens to the money in the Depository Education and Awareness Fund?

Do you have any idea how much money lies unclaimed in the bank deposits of commercial banks in India? It is a whopping INR 3,652 crores. You and several other investors might have left thousands or even lakhs of rupees in these accounts, untouched for a decade in bank accounts and deposits. These are now in operative. Why would you leave lakhs of rupees in a bank account and not touch it for a decade? The answer is obvious isn’t it…Perhaps you do not know that such a bank account exists. How is this possible? What if your grandfather had kept a few lakhs in a bank account, intending to tell you one day. Unfortunately he passed away before he could tell you. How would you know of this bank account? Lakhs of rupees would lie unclaimed and this bank account became in operative, in 10 years. This money would go to the Depository Education and Awareness Fund. This tells you why you need to make a WILL. Your money could go places where you never intend it to go.

This money mainly goes to not for profit public charitable trusts, universities and even corporates. These entities are involved in educational programmes, financial literacy and educational programmes, seminars and even research activities. What is the objective of the Depository Education and Awareness Fund? The objective of the Depository Education and Awareness Fund is one and one thing only…Activities relating to promoting the bank depositors education and awareness. This means banks want to help you get financial literate and be a financially educated person.

Is Depository Education and Awareness Fund Serving Its Purpose?

Any institution which deals with public money, is required by law to promote and contribute towards investor awareness. Banks can do this…even corporates can do this…However the truth of the matter is banks and institutions do not go the whole way while educating investors, or even while conducting financial awareness workshops. They do it just for the heck of doing it. These half hearted attempts are bound to fail. What’s the reason why fund houses fail when it comes to providing good quality financial education? Simple…The main job of banks is gathering deposits and lending. Financial education and investor awareness comes second. Any job not done whole heartedly is bound to fail. The same holds true for fund houses, whose main aim is to tap investors. Not for profit public charitable trusts can do a good job and might even have the resources. The problem is talent….Do these public trusts have the necessary talent to provide a good financial education, to those they serve?

The answer…Corporates whose sole aim is the financial literacy and education of the citizens of our country. This would mean a job well. If the citizens of our country have to be financially educated, corporates could well show the way. They have talent and also money. But financially educating all the citizens of our country, is not an easy job. More than 75% of the citizens of our country, do not understand key financial concepts. Corporates who are into financial literacy and awareness require all the help they can get. If the Depository Education and Awareness Fund can look to corporate firms who are involved in financial literacy, it might go a long way in ensuring each and every citizen of our country is financially literate.

There are more reasons for you to be financially literate than you can think of. Better consult our team of wealth doctors at IndianMoney.com, always ready to help and guide you. You can explore this unique Free Advisory Service just by giving a missed call on 022 6181 6111. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.

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Article Author

Mr. C.S. Sudheer

Mr C.S.Sudheer is a management graduate. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.

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