Zerodha's Nithin Kamath has a solution for ₹80,000 crore unclaimed money
Online broking firm Zerodha's co-founder Nithin Kamath on Monday said that at least ₹80,000 crore lies unclaimed across banks, demat and other accounts as many people don't add nominees.
For this reason, Kamath said that Zerodha is adding an alert feature, which will 'notify nominees when accounts become dormant and they don't reKYC.' Zerodha will also enable customers to create and change nominations online, as most people miss adding nominees, partly because adding a nominee was an offline process.
Taking to Twitter, Kamath also hoped that soon, banks and other online brokerages would follow and enable such a feature to reduce unclaimed amounts.
Earlier today, Zerodha enabled the feature of filing or changing nominations online for investors on its platform. If the customer’s account becomes dormant due to lack of activity for over a year, the brokerage will contact the nominees over SMS and email to inform them about the existence of the account, the company said in a statement.
“While the demat account opening became digital in 2016 (using Aadhaar eSign), adding nominees has been a physical process until now. This is because the process of nomination that the MCA defined mandated the collection of a physical form and multiple witness signatures. The regulation around this changed very recently, with SEBI allowing an option to add up to 3 nominees to your trading & demat account completely online using eSign," it added.
Why do the nominees have to be alerted?
Quoting a recent survey, Zerodha said that there is a corpus of over Rs. 82,000 crore lying in unclaimed deposits in India. This is a conservative estimate and includes:
-Unclaimed Provident Fund Accounts – Rs. 26,497 Cr
-Unclaimed Bank Accounts – Rs. 18,381 Cr
-Inactive Mutual Fund Accounts – Rs. 17,880 Cr
-Unclaimed LIC Policies – Rs. 15,167 Cr
-Matured Fixed Deposits – Rs. 4,820 Cr
-Unclaimed Dividends – Rs. 4,100 Cr
“These are unclaimed, most likely because the nominees don’t know of the existence of these assets. We hope that the alert feature will act as a backup for all our customers in case of any unforeseen eventualities," it stated.
Here's how to add nominee on Zerodha:
-You will need Aadhaar linked to your mobile number to receive the OTP and eSign.
-You need to upload the proof of identity of the nominee in PDF format. You can convert JPEG images to PDF for this.
-Once you have completed the above process, nominee addition to the account can take up to 48 hours. You will get an email from Zeroha as well as from CDSL (Depository).
Customers can add up to three nominees online and this nomination covers all your investments at Zerodha including stocks, mutual funds and bonds, the company further added.
Zerodha's co-founders Nithin Kamath and Nikhil Kamath are the richest self-made billionaires in India under 40, according to IIFL Wealth and Hurun India’s 40 and Under Self-Made Rich List 2020. Nithin and Nikhil Kamath are the wealthiest entrepreneurs under the age of 40 in India with a wealth of around ₹24,000 crore.