Bank of Uganda (BoU) has said government has no intentions of taking over or even taxing unclaimed balances in dormant bank accounts or mobile money accounts.
In a communication from BoU Governor Emmanuel Tumusiime-Mutebile and the Minister of Finance Hon Matia Kasaija, they say media reports that there were plans by government to take depositors’ idle cash on dormant bank accounts under the National Payment System (NPS) Act were misleading.
As a regulator of the banking sector, BoU applies a set of laws to deal with unclaimed balances or dormant accounts for Supervised Financial Institutions (SFIs) and Electronic Money Issuers (EMIs).
According to Section 119 of the Financial Institutions Act (FIA) 2004 and Section 83 of the Microfinance Deposit-taking Institutions (MDI) Act 2003, a dormant account is one that has not had any activity for a period of two years in an SFI. This includes fixed deposit accounts that have not had any activity for two years following the maturity date.
After two years of inactivity, the SFI transfers the said accounts to a separate register of dormant accounts in its books and a notice in writing of that action is sent to the customer at his or her last known address.
Once the dormant account has been on the register for three years, the Supervised Financial Institution advertises this fact in the print media. It should be noted that any account may be transferred out of the register of dormant accounts if the depositor or if the depositor is dead, his or her legal representative, makes such a request.
Unclaimed balances shall after a period of five years from the date of the advertisement be transferred to Bank of Uganda.
The public should note that BoU shall refund any unclaimed balances to the depositor or those balances with the supervised Financial Institution or if the depositor is dead, his or her legal representative, if a request is made after the dormant account has been transferred to the Bank of Uganda.
For purposes of electronic money (mobile money), section 57 of the National Payment Systems Act 2020, made similar provisions. The public should note that act give the mandate to regulate Electronic Money Issuers.
According to section 57 of the NPS Act 2020, a dormant account is that has not had any activity for a period of nine consecutive months. The electronic money issuer shall give notice to the customer at least one month before expiry of the nine months.
At expiry of nine months, the e-money account will be suspended and subsequently blocked. five days after blocking the e-money account, the electronic money issuer shall give notice to the customer that the account is blocked and provide instructions on how the account can be activated.
If the account is not activated within six months after it has been blocked, the electronic money issuer shall close the e-money account. Upon the closure of the account, the trustees shall transfer the balance on the electronic money account and the identification information of the relevant customer to Bank of Uganda.
BoU shall pay unclaimed balances to the customer if the claim is made within seven years; if the account owner is dead their legal representative or administrator of his estate shall make such a claim.
BoU shall after those seven years, if unclaimed, transfer the unclaimed balances to the Consolidated Fund.
The public is informed that there is a period of 10 years within which to rectify the issues of unclaimed balances on our accounts held with supervised financial institutions. Customers, who hold accounts with electronic money issuers have a total of eight years and three months within which to deal with the issue of dormant account.
As such, BoU assures Ugandans that government will not take over unclaimed balances that are lying idle on accounts held either with supervised financial institutions or with electronic money issuers.