PSBs to be allowed to transfer shares to IEPF

09 Apr

The finance ministry is considering amending the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, which governs public-sector banks (PSBs), to make suitable provisions for allowing PSBs to transfer shares to the Investor Education and Protection Fund (IEPF) when dividends of such shares remain unclaimed by the investors for seven consecutive years.
The Section 10B of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, allows the transfer of unclaimed dividends to the IEPF, but does not mention a provision for transferring unclaimed shares and may now be amended by the next government to allow such transfers to happen as per a recent notification.
An email query sent to the finance ministry remained unanswered until the time of going to press.
IEPF was established for the promotion of investor awareness and protection of their interests. Unclaimed dividends and shares transferred to IEPF can be easily claimed by the investor by submitting the required documents and following the verification process.