As per a senior official, the government plans to introduce an integrated portal for investors by February 2024, as outlined in the Union budget for 2023-24. This portal aims to facilitate the swift retrieval of unclaimed dividends and shares.
The Investor Education and Protection Fund Authority (IEPFA), operating under the corporate affairs ministry, is working towards simplifying the procedure for investors to retrieve unclaimed shares and dividends. The official mentioned that this initiative aims to reduce the need for excessive documentation, streamlining the process for investors. This will be beneficial in facilitating easier access to unclaimed shares and dividends.
Companies transfer shares, dividends, and matured debentures that remain unclaimed for seven years to the Investor Education and Protection Fund Authority (IEPFA). Based on official data, as of March 2022, the unclaimed amount held by the IEPFA amounted to Rs 5,262 crore, which reflects a 9% increase compared to the previous year. It’s worth noting that this figure has continued to rise since then.
Currently, the refund process involves a cumbersome requirement of approximately two dozen documents, which undergo multiple scrutinies at various levels. This complex procedure leads to significant delays, causing the settlement to exceed the intended timeframe of 60 days. As a result, the process often takes more than a year to complete. The excessive documentation and multiple reviews contribute to the prolonged duration of the refund process.
To address the delays in settlement, the finance and corporate affairs minister, Nirmala Sitharaman, announced the introduction of an integrated portal in the budget for the current financial year. This portal aims to expedite the process by enabling investors to easily verify whether their shares or dividends are held by the IEPFA. By providing a streamlined platform for checking the status of their unclaimed assets, investors can access relevant information swiftly and efficiently.
The official mentioned that the proposed portal would enable investors to submit claim forms, undergo e-verification, and access a dashboard of information online. This streamlined process aims to simplify claim submission and provide comprehensive updates for investors.
The existing system relies on manual intervention for the settlement, resulting in delays and creating the potential for malpractice. The ministry aims to address these issues and prevent malpractice by implementing measures to streamline and automate the settlement process.
During the budget presentation, Sitharaman emphasised the importance of investor protection and strengthening the financial sector. She proposed the establishment of an integrated IT portal to facilitate the retrieval of unclaimed shares and dividends from the Investor Education and Protection Fund Authority. This portal aims to enhance ease and efficiency in reclaiming the process of unclaimed assets for investors.
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