In a stakeholders’ consultation held by the central government, Sebi suggested that the refund process of these unclaimed assets could be modelled on the lines of the Reserve Bank of India’s Depositor Education and Awareness Fund (DEAF), which holds unclaimed funds of bank depositors.
However, there is a key difference between how the two funds operate. While IEPFA approves the refund based on the verification of investor claims by the investee company, banks directly refund depositors’ claims and seek reimbursement from DEAF maintained by RBI.
In response to emailed queries, Anita Shah Akella, IEPFA chief executive and joint secretary in the ministry of corporate affairs, explained why the DEAF model is not suitable for IEPF. “Sebi, as a part of the consultation, advised that the refund from IEPF can be modelled on the DEAF of RBI. However, the refund from IEPF involves securities, which are not fungible, unlike money.”
IEPF, the fund where companies transfer unclaimed dividends, interest on debentures and deposits on maturity after trying to find the investor or their heirs for seven years, held over ₹5,600 crore at the end of January as per official records. However, wealth managers said this is only the dividend part, and other funds and the value of shares itself would be much more.
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