How to recover hidden treasure? Here is a guide to claiming investment

As an investor, you may have lost track of some of your assets or investments over time. Lack of accurate record-keeping or simply overlooking some assets can make some of your investments go ‘underground’, creating hidden treasures of sorts. Recovering these proverbial treasures can sometimes be nerve-racking as it involves tracking down investments, updating records, and sometimes proving ownership. Here is a simplified guide to help you reclaim your hidden investments, thereby optimising your wealth.

Sanchit Garg – Co-founder and CEO of GLC Wealth Advisor LLP, said, “There are several Indian families settled across the world who are struggling to claim their old unclaimed investments in shares and dividends because of a lack of knowledge about such investments or due to the loss of relevant documents over many years and navigating through the complex recovery process.”

In many scenarios, families are sitting on multiple lakhs and crores of investments. Still, they are unaware as generations have passed since the time the investments were made, and the transfer of information was improper.

Digging out old records like family files and accounting records and sharing certificates/dividends, wills, etc., is a good starting point for families to locate these hidden treasures.

The government of India has also created a centralised portal where families can search for their unclaimed investments; however, this portal might not give you 100% of the information as it’s not fully comprehensive & requires updation from time to time.

“NRIs who have settled abroad for many years may face multi-jurisdictional issues along with some additional formalities like PAN updation and opening NRE/NRO bank & demat accounts. According to some estimates, these hidden treasures are worth Rs 50,000 to Rs 1 lakh crore,” said Garg.

Here is a simplified guide which can help you receive your reclaim

Step 1. Identify your investments: It is essential to perform a thorough financial audit or self-assessment. Look through all your paperwork and online banking records and, if possible, enlist a financial advisor to help you identify any remaining investment sources you might have “forgotten” about.

“Unclaimed deposits held by banks and financial institutions are transferred to the Reserve Bank of India’s Depositor Education and Awareness Fund (DEAF). Individuals can claim unclaimed deposits by visiting their banks’ websites or local branches. There is no time limit for claiming unclaimed deposits, and account holders or legal heirs can claim them by providing KYC documents, PAN cards, fixed deposit certificates, wills, Legal Heir certificates/Surviving Member certificates, indemnity bonds, etc. They have to file a claim form and submit it to the bank. No tax implications are imposed for claiming unclaimed deposits,” said Garg.

Step 2. Reach out to institutions: Once you have identified these forgotten assets, contact the respective financial institutions, like insurance companies, banks, or mutual fund houses, to claim your investment. Be prepared to provide identification and investment proof.

Garg said, “Investors can visit the official IEPF website – https://www.iepf.gov.in  to claim their unclaimed shares and dividends. The government portal provides a search database whereby investors can search for their unclaimed shares details. To begin with, they have to reach out to the respective companies/RTAs to update their KYC details, including address, signature, bank details, etc.”

Step 3. Documentation: Financial institutions often require you to verify your identity and investment ownership. “Investors who have lost their share certificates are required to comply with the documents for the issue of duplicate shares, such as an indemnity bond, surety affidavits, FIR for loss of shares, newspaper advertisements, etc. Once the family learns about the investments, they have to go through a tedious process of KYC updation, issue of duplicate shares, claim from IEPF and even court process in case of deceased shareholders,” said Garg.

Step 4. Getting entitlement letters: After verifying all details, the companies issue Entitlement Letters to the investors. Then, they have to file their claim on the government portal on mca.gov.in and submit all physical documents to the nodal officers of the concerned company. The company then submits a Verification Report to the IEPF Authority for further verification, approval and release of shares/dividends to the investors. The process is bound to take a few months to a year or more.

Step 5. Recovery process: After confirming your identity and investment ownership, the recovery process commences. However, this process’s length and complexity can vary depending on each institution’s specific procedures and the investment type in question. “It can take several months to years for the claimants to claim such investments after completing the compliances and legal formalities,” said Garg.