The designation of financial assets requires an update: ARIA


Appointment facilities in various asset classes, especially financial assets, need to be upgraded to make it a route to succession according to the current needs of financial consumers and citizens, according to the recent leading article on the subject, written by Pramod Rao Group General Counsel, ICICI Bank (writing in a personal capacity) with contributions from the Association of Registered Investment Advisors (ARIA).

This was posted by KV Kamath – the Chairman of NaBFID (National Bank for Infrastructure and Development Finance) and former Chairman of Infosys & ICICI Bank.

The flagship paper is part of a white paper titled; Reimagining Nominations: Making Succession Smoother and Simpler, which was published in 2021, with the same contributors as the white paper.

According to the document, “The level of unclaimed funds at Rs. 1.60 lakh Crores, the cumbersome and time-consuming legal process, and the current situation caused by Covid-19 signal that further review and overhaul is needed. The variation and inconsistent treatment of nominations among these seemingly identical categories of financial assets have emerged from different laws, periods of enactment, schemes designed under such laws, clarifications or case law. Some variants are quite progressive, and some provisions are downright discriminatory. All asset classes, especially financial assets, require review, reconciliation and upgrading to incorporate the recommendations made in this white paper.”

According to the press release, the study provides insight and makes suggestions on all retirement savings systems – EPF (incorporating EDLI and EPS), government EPF and PPF – for review and necessary reforms. This could take the form of updating the definition of ‘family’ to make it non-discriminatory in some cases or removing the link to ‘family’ from appointment altogether in other cases.

“I commend Pramod & ARIA for adding to the already published white paper – Reimagining Nominations. The significance can be understood in the context of the figure of Rs. 1.60 lakh crores of unclaimed investor funds. I’m sure that government and regulatory authorities will consider these recommendations and facilitate processes that will benefit citizens,” Kamath said.

“The paper highlights key developments in retirement savings plans over the past decades and details the current state of affairs. A smoother and simpler succession process will enable a rapid transfer of assets. It will also relieve the courts of the unnecessary burden of disputed and disputed inheritance issues,” Rao added.

“The study was conducted by a team of experts to understand the current state of these programs and ways to improve efficiency for all stakeholders, particularly to reduce the number of unclaimed assets,” said Harsh Roongta, president of ARIA.

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