IEPF or Investor Education and Protection Fund is certainly among the safer and better things that could have happened to your investment. Given the current scenario of the economy, any private company can be subjected to solvency overnight, or simply turn out to be fraudulent. Keeping that in mind, many investors are shifting their focus from these private concerns and putting their money under banners like IEPF to make sure they get their due refund using the IEPF form 5.
Investor Education and Protection Fund or IEPF is a fund which was established under the guidance of SEBI (Securities & Exchange Board of India) and MCA (Ministry of Corporate Affairs). This government fund has been enumerated under Section 205C of Companies Act, 1956.
The website was set up to promote “investors’ awareness and protection of the interests of the investors”. The portal do not offer any kind of investment advice/ evaluation.
It was set up with the intention to pool in unclaimed money (and interests) which has been lying idle (unclaimed) in the company for a period of 7 years.
The unclaimed amount include all the dividends which means all the corporate benefits pertaining to:
- Asset Management Companies
- Matured Company Deposits
- Share Application Money
- Company Debentures
- Interest Accrued on all of them
Earlier, money could not be refunded once it was transferred to the IEPF authority. But post-2016, MCA changed the existing norm. IEPF welcomed greater flexibility. An individual or an investor can expect a refund of the unclaimed money or the unpaid company from the IEPF authority. The claimant needs to file IEPF form 5 to get the money refund. Essential documents need to be furnished along with the IEPF refund form available on the online portal of IEPF authority.
Such a wise decision from MCA has been a blessing for the genuine investors who could not make lawful money claims earlier.
Steps to Claim a Refund from IEPF
Unclaimed investment return can be claimed from IEPF. The steps of IEPF claim include:
Step 1: Download the IEPF form 5 from the IEPF portal http://www.iepf.gov.in
Step 2: Fill up the IEPF Form 5 on the IEPF website along with fee details as decided by the governing authority. Fill up details like name, company’s name, Aadhar number, amount of money claimed and the bank account for transfer of refund money. The uploaded form is processed by MCA 21 (e-governance system of MCA) to generate SRN (always keep a note of SRN for future tracking of the IEPF refund claim procedure). Upon clicking ‘PAY” option, the portal generates acknowledgement receipt.
Step 3: The hard copy of the form (which also carries your signature), along with the relevant documents, acknowledgement receipt and indemnity bond, need to be sent to the Nodal Officer of the company for verification purpose. Form and the documents require to be sent in a sealed envelope marked “”Claim for refund from IEPF Authority”.
Step 4: The Company needs to comply with the deadline set for verification and re-submission of the form 5 along with the attached documents to IEPF within a time frame of 15 days upon receipt of the IEPF claim form.
Step 5: IEPF initiates e-payment for money refund.
Step 6: The refund is done via electronic transfer to the bank account number which is linked to the Aadhar number of the claimant. In case the shares are claimed, the money goes directly to the claimant’s Demat account by IEPF.
Procedures of IEPF claims are monitored by a trust to protect the interest of the investors and decide on amount that needs to be dispensed for promoting investor awareness.
Reasons behind unclaimed amounts
You must be wondering why so much amount goes unclaimed by the respective parties that an entire fund has been put in place to take care of it. But there are some legitimate reasons behind why dividends or debenture amounts remain unclaimed by parties. Read More – about Unclaimed Dividend