The Scale of the Unclaimed Crores
According to the latest annual report from the Securities and Exchange Board of India (SEBI), the pool of unclaimed money with mutual funds grew by nearly 10% in the 2025-26 financial year to reach Rs 3,811 crore. This isn't lost money, but rather funds that
asset management companies (AMCs) could not successfully deliver to investors or their legal heirs. The amount has surged by over 150% in the last three years, signalling a growing problem. The majority of this sum, about Rs 2,689 crore, consists of unclaimed dividends, while the remaining Rs 1,122 crore comes from redemption proceeds that never reached the investor's bank account.
How Do Investments Become 'Unclaimed'?
Funds typically become unclaimed for straightforward, often administrative, reasons. An investor might move to a new city and change their address but forget to update their mutual fund folio. Similarly, they might close an old bank account and open a new one without linking it to their investments. In such cases, when a dividend is declared or a redemption is processed, the payment fails. Cheques sent to an old address may expire, or electronic transfers might bounce back from a closed account. Over time, as contact details become outdated and KYC (Know Your Customer) information falls out of sync, the investor becomes untraceable to the fund house, and their money is moved to an unclaimed pool.
The Crucial Role of a Nominee
This is where a nominee becomes invaluable. A nominee is a person you designate to receive your assets in the event of your death. Having a registered nominee is the single most effective way to ensure a smooth transfer of your investments to your loved ones. It acts as a legal and procedural shortcut, allowing the designated person to claim the funds with minimal hassle. Without a nominee, your family or legal heirs face a much more arduous, expensive, and time-consuming process to prove their rightful claim to your hard-earned money. The nominee is a custodian who holds the assets in trust for the legal heirs, simplifying the entire transmission process from months or even years to just a matter of days or weeks.
The Difficult Path for Heirs Without a Nomination
If an investor passes away without naming a nominee, their legal heirs must navigate a complex legal maze. The process involves submitting a host of documents, including the investor's death certificate, their own KYC documents, and proof of their relationship to the deceased. For larger claim amounts, typically over Rs 10 lakh, fund houses often require a succession certificate, a probated will, or a letter of administration from a court. Obtaining these legal documents is a lengthy and often costly process that can cause significant distress to a grieving family. This difficult procedure is precisely what the simple act of nomination is designed to prevent.
How to Add or Update Your Nominee Details
Checking and updating your nomination status is easier than ever. Most processes are now online and can be completed in minutes. 1. Use Centralised Platforms: Portals like MF Central, CAMS, and KFintech allow you to see a consolidated view of your investments and update nominee details across multiple fund houses. The 'MITRA' tool on MF Central is specifically designed to help trace inactive or unclaimed folios. 2. Visit AMC Websites: You can log in directly to the website of the asset management company (AMC) where you hold investments and navigate to the 'Update Nominee' section. 3. Through Your Demat Account: If your mutual funds are held in a demat account, you can update the nomination through your depository participant or broker's portal. Under new SEBI rules effective September 1, 2026, all new single-holder accounts must either provide nomination details or formally opt out, ensuring investors make a conscious choice. You can add up to three nominees and specify the percentage share for each.
