OVERVIEW OF UNCLAIMED DIVIDENDS & SHARES

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What are unclaimed dividends and how are they managed?

Investors have various investment options and opportunities in the Indian financial market, but sometimes, funds may go unclaimed or forgotten. When an investor fails to cash in a redemption or dividend cheque before it becomes invalid, the amount is classified as unclaimed. However, investors should also note that unclaimed dividends do not disappear but remain with the respective financial institutions until rightfully claimed.

The unclaimed dividends and shares are held by the company in trust for the shareholder for a certain time period after which they are transferred to the Investor Education and Protection Fund (IEPF) account, which is managed by the Ministry of Corporate Affairs.

Why are dividends left unclaimed?

There could be multiple reasons for dividends being left unclaimed. Some common factors contributing to unclaimed dividends in the Indian market include:

• Change in address
• Misplaced or damaged physical share certificates
• Non-updation of bank details
• Death of the primary holder with no information to inheritors etc.

What is the Investor Education and Protection Fund (IEPF)?

The purpose of the Investor Education and Protection Fund (IEPF) is to increase investor awareness and safeguard their interests against fraudulent activities in the financial markets. Additionally, IEPF also manages the facilitation of the refund process for unpaid dividends and shares transferred to it on behalf of investors.

Posted On: 2024-04-15