The Budget announcement related to establishing an integrated IT portal to reclaim unclaimed shares and unpaid dividends from the Investor Education and Protection Fund Authority (IEPFA) will usher in convenience and ease, and free hapless investors from the hands of touts and brokers.
Numbers are quite significant. According to data shared in the Lok Sabha, the total number of unclaimed shares lying with the government’s IEPF Authority reached over 1.1 billion and has more than doubled since 2017-18. Unclaimed dividends worth over ₹5,500 crore had accumulated as of October 2022.
Dividends unclaimed or unpaid by shareholders after seven years need to be transferred by company to the IEPF. Till now, any person, whose unclaimed or unpaid amount has been transferred by the company to IEPF could claim their refunds to the IEPF Authority but the claimant needed to file form IEPF-5 along with requisite documents. Because the process is not easy, many touts, ‘consultants’ and brokers offer to do the same for claimants by taking a fee. The service experience has not been good for many during these processes, and some point to the presence of rackets.
Users say the existing system of reclaiming unclaimed shares and dividends also has certain problems such as non-availability of IEPF helpdesk. An integrated IT portal could reduce the hassles faced by legal heirs who have been waiting endlessly to get their claims approved.
With an integrated IT portal, the entire process of reclaiming including submitting documents, verifying them, getting necessary approvals, following up on the progress and finally getting the shares/dividends back should be hassle-free. Using the integrated IT portal will bring in much-needed transparency and offer claimants updates in terms of the progress.