The total number of applications filed by investors to the Investor Education and Protection Fund Authority (IEPFA) for claiming their unpaid dividends in the current financial year is likely to cross 45,000, up 18% on year, official sources privy to the matter told FE.
Till December-end, the number of applications (IEPF Form 5) filed stood at 36,000 – the highest in the first nine months of any financial year since the establishment of the authority in FY17. Form 5 is the application filed by an investor to the authority for claiming unpaid amounts and shares out of IEPF.
The IEPF has refunded about Rs 12 crore as dividends to investors after assessing their applications till December end – again the highest in the first nine months of a financial year. In FY23, the IEPF issued refunds worth Rs 11.5 crore.
“The spurt in applications filed and the refunds is due to better management at the authority. A focused group within the IEPFA has been created to manage shares, thereby reducing time for approval of applications and issuing refunds,” the source said.
The government had set up the IEPFA under Section 125 of the Companies Act, 2013 with the objective of promoting investor education, awareness, protection and to make refunds of claims to the investors. Section 124 of the Act says that, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the company to IEPFA.
The Budget for 2023-24 had announced the establishment of an integrated IT portal to reclaim unclaimed shares and unpaid dividends from the IEPFA. Sources say the portal will be launched by March.
Through this integrated IT portal, the entire reclamation process, from document submission and verification to securing necessary approvals and tracking progress, as well as receiving shares or dividends, can be streamlined and made hassle-free, said the source.
Utilising the integrated IT portal would introduce essential transparency, providing claimants with updates on the progress of their claims.
The total number of unclaimed shares lying with the IEPFA has reached over 1.1 billion and has more than doubled since FY18. Unclaimed dividends worth over ₹5,500 crore had accumulated as of October 2022.
