Recovery of SBI Shares from IEPF

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Overview:

The state-owned banking and financial services company State Bank of India (SBI) is based in India. Public Sector Banks is the phrase used to describe these organisations. The largest bank in India and the largest PSB is SBI. As of 31 March 2021, SBI had 245,652 employees, making it one of the largest employers in the world. One of India's most prominent public sector banks is the State Bank of India or SBI. Its corporate headquarters are in Mumbai, Maharashtra, where it was established in 1955. With more than 24,000 branches and more than 59,000 ATMs, SBI maintains a sizable branch network nationwide. 

Financial services offered by SBI include insurance, investment banking, corporate banking, and personal banking. Savings accounts, current accounts, fixed deposits, and loans, including personal, auto, and house loans, are all part of its banking services.

Due to the bank's size, stability, and steady performance, SBI shares are a well-liked investment choice among individual and institutional investors. The COVID-19 lockdowns in 2020 caused a slowdown, but it could not impede the growth of the Company's shares, which increased by 10.63% in June, 7.28% in July, and 10.73% in August. The Company's shares have grown steadily during the last five months, except for a price decline in September 2020.

How is Investor Education and Protection Fund created?

Following the Companies Act of 2013, the Government of India established the Investor Education and Protection Fund (IEPF) in 2016. The IEPF's mission is to safeguard investors' interests and offer a system for remitting unclaimed dividends, matured deposits, and other securities to their original owners. The necessity to provide a framework for investor protection and to guarantee that unclaimed property is used productively for the economy's benefit led to the establishment of the IEPF. Before the IEPF was established, the unclaimed property would stay with businesses permanently, decreasing the value for owners and other stakeholders.

The IEPF is a custodian of unclaimed securities controlled by the Ministry of Corporate Affairs. Its main job is to collect and hold onto unclaimed securities until their rightful owners claim them. Investors can use the IEPF's database of unclaimed securities to confirm their ownership of stocks.

Establishing the IEPF was a significant step in ensuring that investor rights are protected in India and that unclaimed assets be used productively for the economy. The IEPF has contributed to boosting investor trust in the Indian financial markets by offering a mechanism to return unclaimed assets to their original owners.

Process of Recovering the SBI shares from IEPF

For the recovery of SBI shares from IEPF, the following procedure must be performed.

  1. Completion of the Application Form

Any person who has shares transferred in the fund can claim the shares under Section 124 (6) or can also apply under 125 (3) (a) for a refund. The person who is claiming the shares has to include the following given information in the form:

  • Required information of the applicant
  • All details of the shares which are being claimed
  • Information about the Company
  • Information of all securities/ deposits in year-wise format
  • Aadhaar Card
  • Passport (If the person is NRI)
  • OCI/PIO Card No (If the person is NRI)
  • All details of the amount which is claimed
  • Particulars of Bank Account

The application then is to be sent to the officer who is the Company's registrar that owed the money.

  1. Submitting the Claim to the Company

The Claim for a refund from the IEPF Authority should be submitted to the Company's IEPF Nodal Officer/Registrar with the following necessary papers:

  • Form IEPF-5 with the sign of the claimant (printed form)
  • Aadhaar card
  • Entitlement proof
  • SRN Number and acknowledgement
  • Original share certificates 
  • Signs of claimant and witnesses on the advanced stamped receipt
  • Original indemnity bond (along with the sign of claimant)
  • Demat account's client master list (copy version)
  • Passport
  • Overseas Citizen of India or PIO card
  • Cancelled cheque
  1. Claim submission by the Company to IEPF Authority

A total of fifteen days is given to the respective Company from the time they have received the claim form to make a verification report and also deliver it with the supporting necessary papers of the claimant to the authorities of Investors Education and Provident Fund (IEPF).

  1. Refund to the claimant by the IEPF Authority

The Authorities of IEPF must decide on the claimant's request for reimbursement within 60 days. If so, it will issue a sanction order for the refund and send the pay and accounts officer a bill for payment. After verifying the claimant's eligibility, the IEPF Authority and the authority's drawing and disbursing officer will submit a bill to the pay and accounts officer for payment. The number of shares or rights credited to the claimant's Demat account will be credited to their account.

Services offered by Enterslice

  1. Recovery of Shares from IEPF

The Recovery of Shares from IEPF initiative aims to retrieve shares that have been transferred to the fund but have yet to be claimed. These shares can only be recovered once the MCA and IEPF procedures have been completed. We provide comprehensive support, including paperwork, filling out application forms, and necessary paper submission. We also follow up often with the IEPF to check on the status of your application. Our expert team of knowledgeable professionals can help you through the entire recovery process. Our aim is to make the process of requesting compensation for unclaimed shares as simple as possible.

  1. Transmission of shares

The term "transmission of shares" describes the passing of share ownership from one person to another by inheritance, succession, or legal process. When a shareholder dies, their shares are transferred to their legal heirs or beneficiaries. It can also happen when a shareholder files for bankruptcy, in which case their shares are given to their creditors. The procedure entails the formal transfer of ownership of the shares from the decedent or bankrupt shareholder to the new owner, who then takes on all rights and obligations related to the shares. To become the legitimate owner of the shares, the new owner must contact the firm and update the share registration with their information.

  1. Transfer of shares

The process of willingly transferring ownership of shares from one person to another is called a share transfer. In the stock market, where investors may purchase and sell shares of publicly traded firms, it is a customary practice. A private contract between the Buyer and seller or a stock exchange can be used to transfer the assets. The seller must notify the firm and update the share register with the Buyer's information before transferring the shares. Then the Seller shall deliver the Share Certificate to the Buyer, and the Buyer shall pay the Purchase Price. The transfer of shares is subject to legal requirements, including paperwork and compliance with all applicable laws and rules regulating the transfer of securities.

  1. IEPF Dividend Recovery

A company's profits are distributed to its shareholders as a dividend in cash, shares, or another form as determined by the board of directors. The IEPF receives it as an unclaimed dividend if it goes unclaimed for seven years after it is paid out yearly. Due to a variety of factors, including mistakes in share transfer or transmission, erroneous shareholder records, or unclaimed bonus shares, many investors fail to receive their dividends. Our staff helps customers recover their unclaimed earnings from the IEPF without the need for court intervention.

Frequently Asked Questions

One must be a shareholder of SBI whose shares have been transferred to IEPF owing to noncompliance with the Companies Act of 2013 in order to claim SBI shares from IEPF. In addition, one needs to follow the IEPF application procedure and provide a confirmation of share ownership.

If dividends are not claimed by stockholders within seven years, then they are transferred to the IEPF.

The Company must submit Form IEPF-3, containing information about these shares, within 30 days of the end of the financial year.

Yes, even if you've misplaced your share certificates, you can still claim SBI shares. However, you would also need to submit more supporting evidence, such as a copy of the FIR you filed in the event that your share certificates were misplaced.

Legal heirs of a dead shareholder may, with the proper paperwork-such as a death certificate and inheritance proof- claim SBI shares from IEPF.

The Company is required to transfer all shares of the Company for which dividends have remained unpaid or unclaimed for seven or more years in IEPF set up by the Government of India.

The time limit for the unclaimed dividend is within seven years, as stated in the Companies Act, 2013.

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