1201189 SIP myths you must know!

Unclaimed shares and dividend form one of the stubborn sink fields where a huge amount of wealth of the common shareholders lie idly, far beyond possession of either those who have invested them or their legal heirs. To allow the rightful claimants access to that wealth, the ministry of corporate affairs (MCA) will soon launch an integrated portal, as proposed in the Union budget for FY24, The Economic Times has reported.

Incidentally, on August 17, the RBI announced the launch of the UDGAM portal as a one-stop shop to allow common people to locate and claim unclaimed deposits in banks that amount to thousands of crores of rupees.
Once the portal is up and running, wealth in the form of shares, dividends and matured debentures will become accessible at the click of a button. According to the rules, shares, dividends and matured debentures that are not claimed for seven years are transferred by the companies to Investor Education and Protection Fund Authority (IEPFA).

Official statistics puts the unclaimed amount available with the IEPF at Rs 5,262 crore on March 31, 2022. It showed a rise of 9% from a year earlier.

This portal aims at facilitating swift retrieval of unclaimed dividends and shares.
The IEPFA functions under the corporate affairs ministry. It is engaged in simplifying the procedure for investors to make a claim on the unclaimed shares and dividends lying with them.

Currently, the process needs excessive documentation and the entire effort of the government has been to increasing the convenience for the claimants by cutting down on the huge paperwork needed for one to reach the funds.

Right now one needs to furnish approximately two dozen documents and each of them is subjected to scrutiny at different levels. It not only makes the process frustrating for claimants and creates huge delays. The settlement regularly exceeds the stipulated timeframe of 60 days by a big margin.

To address the inordinate delays and avoidable harassment in-built in the system, Union finance and minister, Nirmala Sitharaman, announced during presentation of the current year’s budget that an integrated portal would be launched to make life easier for the claimants.

Through this portal one can easily verify whether their shares or dividends are held in the fund.
The finance official said that the portal would enable investors to quickly locate their assets and submit claim forms, pass a stage of e-verification, and reach a dashboard of information. This entire operation would take place online.

The abolition of manual intervention for the location and settlement of claims would eliminate delays and possible malpractice. The settlement process would be automated to remove possibilities of any gratification of employees involved in the settlement process.

“The portal will have two parts – search and claim process. The search part is almost ready. Testing is going on with regards to the claim part… This will take some time but will be done at the earliest,” the FinMin official told the newspaper.

In her budget speech, finance minister Nirmala Sitharaman said, “To boost investor protection and further solidify the financial sector and allow investors to reclaim unclaimed shares and dividends from the IEPFA with ease, an integrated IT portal is proposed to be established”.