SEBI Reports 20% Increase in Unclaimed Money in Mutual Funds
Unclaimed funds in mutual funds have reached alarming levels, with the Securities and Exchange Board of India (Sebi) reporting a significant rise in unclaimed dividends and redemption proceeds. In the fiscal year 2024-25, these unclaimed amounts soared to ₹3,452 crore, marking a 20% increase from the previous year’s ₹2,862 crore. The surge in unclaimed funds highlights not only investor negligence but also underlying structural issues that require urgent attention.
Rising Unclaimed Amounts
The Sebi annual report reveals a concerning trend in unclaimed money within mutual funds. The total unclaimed amount, which includes both dividends and redemption proceeds, has climbed to ₹3,452 crore in 2024-25. This figure represents a 20% increase from ₹2,862 crore in the previous year. Notably, unclaimed redemption amounts rose by 10%, from ₹1,024 crore in March 2024 to ₹1,128 crore in March 2025. Meanwhile, unclaimed dividends saw a more substantial increase of 26%, jumping from ₹1,838 crore to ₹2,324 crore during the same period. This growing pile of unclaimed wealth raises concerns about investor awareness and the efficiency of communication between investors and mutual fund houses.
Reasons Behind Unclaimed Funds
Several factors contribute to the rising levels of unclaimed dividends and redemption proceeds. One primary reason is outdated contact information. Investors frequently change their residence, phone numbers, or email addresses without updating their details with mutual fund houses or registrars. Consequently, payout notifications and credit instructions fail to reach them. Additionally, unclaimed funds can result from bank accounts linked to investment folios being closed or changed without proper updates. Another significant issue is fragmented investing, where individuals hold units in physical form or across multiple folios, sometimes opened jointly with family members. In cases where an investor passes away, heirs may remain unaware of these investments, leaving the funds inaccessible. The absence of a nomination further complicates the situation, as legal processes for transferring assets can be cumbersome.
Steps for Investors to Claim Their Funds
To mitigate the risk of losing unclaimed funds, investors are encouraged to take proactive steps. Consolidating holdings using their Permanent Account Number (PAN) and linking folios to current bank accounts can streamline the process. Additionally, updating mobile numbers, email addresses, and residential addresses ensures timely communication regarding dividends and redemption proceeds. Opting for direct credit of these amounts into bank accounts can also minimize the chances of cheques going undelivered. Furthermore, registering a nominee for each investment is crucial for ensuring a smooth transfer of assets in the event of the investor’s death.
Encouraging Awareness and Action
Sebi and the Association of Mutual Funds in India (AMFI) are actively urging investors to check for unclaimed amounts through fund house websites and the common unclaimed dividend search facility. Regularly reviewing investments and updating communication details can help ensure that hard-earned savings do not remain unclaimed. By taking these steps, investors can safeguard their financial interests and ensure that their investments reach their rightful owners. The rising trend of unclaimed funds serves as a reminder for investors to remain vigilant and proactive in managing their investments.
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