Why can’t legal heirs access bank account details of deceased persons, SC asks Centre

In an important development, the Supreme Court on Tuesday sought an explanation from the Centre and the Reserve Bank of India (RBI) on why details of bank accounts held by deceased persons cannot be disclosed to their legal heirs, and said the government must evolve a policy framework on the issue.A bench comprising Justices Vikram Nath and Sandeep Mehta was hearing a public interest litigation filed by journalist Sucheta Dalal, which sought directions for creating a mechanism to inform legal heirs about unclaimed deposits lying dormant in bank accounts of deceased depositors, reported news agency PTI.“Suppose a man has got 10 different accounts in different countries, he dies intestate, how do his heirs get the details? He may not have done the KYC…" the bench said. “It’s not a question of policy; we are not saying that the transfer is illegal. What we are saying is, what is wrong if we give the information to the legal heirs? You will have to come out with some policy,” the bench observed during the hearing, PTI quoted.Appearing for the petitioner, advocate Prashant Bhushan submitted that the plea seeks directions to make details of such unclaimed accounts publicly accessible. He added that the RBI itself had recommended setting up a “Centralised and Searchable Database” to help individuals trace bank accounts of their deceased parents.Additional Solicitor General N Venkataraman, representing the Centre, said that if a genuine heir approaches the authorities, the amount is refunded from the Depositor Education and Awareness Fund.The Depositor Education and Awareness Fund, created by the RBI in 2014, holds unclaimed deposits transferred from commercial and co-operative banks.The apex court directed the Centre and the RBI to file fresh affidavits on the issue and listed the matter for further hearing on May 5.Earlier, the court had also asked the finance ministry to respond to the PIL, which sought directions for establishing a centralised database to provide information on bank accounts, insurance policies, deposits and post office funds held in the name of deceased persons.The petition has also urged the court to mandate a streamlined procedure to minimise litigation faced by legal heirs while claiming bank deposits, insurance proceeds and post office savings.According to the plea, the Depositors’ Education and Awareness Fund had Rs 39,264.25 crore as of March 2021, up from Rs 33,114 crore in March 2020 and Rs 18,381 crore at the end of March 2019.The petitioner has argued that there is an urgent need to develop an RBI-controlled centralised online database providing key details of deceased account holders, including their name, address and the last date of transaction.