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In a bid to manage unclaimed deposits, the Reserve Bank of India (RBI) has authorised banks to convert into rupee the credit balance in any inoperative foreign currency denominated deposit.
According to RBI, if a foreign currency denominated deposit with a fixed maturity date remains inoperative for a period of three years from the date of maturity of the deposit, at the end of the third year, the bank shall convert the balances lying in the foreign currency denominated deposit into rupee keeping in mind the exchange rate prevailing as on that date.
Thereafter, the depositor shall be entitled to claim either the rupee proceeds and interest or the foreign currency equivalent of the rupee proceeds of the original deposit and interest.
Similarly, in case of foreign currency denominated deposit with no fixed maturity period, if the deposit remains inoperative for a period of three years, the bank shall, after giving a three-month notice to the depositor, convert the deposit from the foreign currency in which it is denominated to rupee at the end of the notice period at the prevailing exchange rate. After this the depositor shall be entitled to claim either the rupee proceeds and interest or the foreign currency equivalent of the rupee proceeds of the original deposit and interest, said RBI.
