India ranks 145 among 190 countries in per capita income. More than 60% of people belong to poor and lower middle class families. In a country where majority of the population is living hand to mouth, there’s a whopping amount of INR 1.35 Lakh crores, unclaimed by Indians across bank deposits, mutual funds and PFs. In case we add real estate, this number would go up further north.
Imagine dedicating your life to creating a better future for your family, only to have your efforts wasted and put in unclaimed accounts, leaving your loved ones to face unnecessary hardship and financial strife. Just the thought of our children's education being cut short or our spouse having to take on an unwanted job due to financial struggles is unbearable. This haunting possibility drove me to investigate the root causes of unclaimed assets, seeking solutions to avoid this situation for our families. In my opinion, key factors contributing are:
- Lack of awareness: For generations we Indians have shied away from discussing finances at home. It was perceived to be an act of selfishness. This taboo has left majority of us unaware of assets, loans and insurances that each of us are building for a better future of our families.
- Complexity of process: We as humans are generally scared of numbers, tedious paperwork or documentation and bureaucratic processes and thanks to the claim/transfer process, it involves all the three. On top of this we are not even in our sane minds to tackle all of this during a loss. This makes it the most difficult task to handle given an added pressure of limited time availability.
- Constant updation: Due to our fast paced lives, especially in urban India we keep changing our addresses, phone numbers and other contact details quite often. We often tend to overlook updating these changes to our financial institutions or linking the new details to our KYC documents. This mismatch in contact details is one of the major issues why claims or transfers are rejected more often than not
- Absence of nominee declaration: In India, generally we are never prepared for adversities in life, especially death. Either because of lack of understanding (both in terms of process and in terms of importance of declaring a nominee) or procrastination, we end up missing this important step, which is a gateway to pass on our hard earned money to our loved ones
- Regulatory hurdles: For assets where nominees are not declared, claiming the assets is made so complex both in terms of number of documents required and complexity of obtaining these documents. This complexity might be intended to prevent fraud claims, but it also creates obstacles for rightful owners trying to make their claims.
While many of these require institutional level changes, let’s take ownership of what we can control. As a first step let’s all pledge to review and declare nominees for all our assets.
Together, we can break the cycle of financial uncertainty and ensure our hard-earned wealth benefits our loved ones.
