Process reforms transform IEPFA

The Investor Education Protection Fund Authority (IEPFA) was set up in 2016 to administer the Investor Education and Protection Fund (IEPF) where unclaimed corporate shares and their related dividends are accumulated. The idea was that unclaimed shares and dividends would be restored to rightful owners from this fund. However, when Economic Advisory Council to the PM started researching the issue for the first time in early 2025, we found that the process was very cumbersome. Claimants often had to wait close to three years to recover their dividends or shares. Unsurprisingly, many claimants either abandoned their claims midway or resorted to paying commissions to intermediaries to navigate the system.

We highlighted these inefficiencies a year ago in our Financial Express article titled “IEPFA Needs Urgent Reform” (https://tinyurl.com/3mu5dscn). At that time (as on 31st March 2025), IEPFA had accumulated a backlog of 51,491 applications. Moreover, the problem was growing with new unclaimed shares continuously pouring into the fund.

Note that the unclaimed shares problem is part of a larger problem of unclaimed financial assets that includes bank deposits, mutual funds, insurance claims, provident funds and so on. The issue was highlighted by Prime Minister Narendra Modi as a part of the “Your Money, Your Right’ initiative launched in October 2025. Major process reforms were implemented by IEPFA over the last year. This article looks at how the reforms were identified and implemented as well as the resulting impact.

As a first step towards understanding the problem, a detailed mapping of the “as-is” process was undertaken. It was found that the overall process entailed twenty-five steps spread over three separate web portals. Each portal related to one of the three broad phases in the process: (i) there was the MCA-21 portal that was then only used for the application and approval process; (ii) the depositories’ portal for share transfers after the approvals, (iii) yet another portal called Public Financial Management System (PFMS) for dividend payments after share transfers.

Incredibly, the three separate portals did not speak to each other and operated in silos. Consequently, the information had to be manually re-entered in each of them and cross-checked multiple times at each stage. This was not merely a waste of time, manual entry mistakes at multiple points could derail the whole process and force the claimant to go back to the starting point. Note that each segment was digitized in its own capacity, but the absence of integration undermined its very purpose. The result was that even after all the approvals were granted after multiple layers of scrutiny and many years of effort, the transfer of shares and dividends took another eighteen to twenty-four months.

Following the as-is process mapping, IEPFA officials undertook a series of significant process reforms in order to resolve the inefficiencies in the system. The most important change was the most obvious one - to integrate the three portals. This eliminated the need for redundant data entry and manual documentation, reducing the number of steps required for share and dividend transfers from 13 to just 4. The change meant that the overall number of steps dropped from 25 steps to 15. Under the new system, once approvals are granted, transfers now occur in parallel and almost instantaneously. What earlier took up to two years is now completed within days.

All pending applications were migrated to the new backend portal by August, and the system has now been fully operational for nearly six months. The results of these reforms have been remarkable.

Between April and September 2025, an average of about 850 applications were approved each month. Following the rollout of new system, the approvals have increased significantly: 3,614 in October 2025, 7,570 in November, 11,443 in December, 8,837 in January 2026, 12,005 in February and about 11,288 in March (as on 23rd March). This translates into an average of about 9,100 approvals per month. In other words, the monthly rate is now comparable to the previous annual rate!

At this pace, the accumulated backlog will be eliminated within the next few months. Meanwhile, new cases are being directly loaded on to the new system and should be processed quite quickly. More can be done, of course, to further improve the service efficiency of IEPFA - such as improving the search facility on the portal - but the remarkable improvements reflect the effectiveness of targeted process reforms.

The above example is an illustration of the transformative potential of targeted process reforms. Over the last few years, scores of such process changes have been introduced by the government at state and central level to improve ease-of-doing-business and ease-of-living. Unlike major structural reforms, they often go unsung but economic efficiency can gain significantly from such small, iterative changes.

Sanyal and Arora are Member and Director respectively at Economic Advisory Council to the PM