The Bank of Ghana has issued Unclaimed Balances & Dormant Accounts directive for banks and specialized deposit-taking institutions that will ensure all balances of inactive accounts are moved into one single account – the dormant account register.
The directive is pursuant to Section 92 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
The objectives of this directive, according to the Bank of Ghana are to establish processes and procedures for reclaim of funds by dormant account holders or their legal representatives, amongst others.
The directive shall however not be applicable to accounts that are subjects of litigation, fraud, investigations by a regulatory authority or law enforcement agencies, and others.
Classification of dormant account
The directive pointed out that a dormant account could be a current or savings account with credit balances and their derivatives with no ‘customer-initiated activity’ by the account holder or a third party on the account holder’s behalf for a period of two years.
It can also be a time deposit account with no customer-initiated activity by the account holder or a third party on the account holder’s behalf for a period of two years after the maturity date of the deposit or a prepaid card account and or any other funds belonging to a customer or non-customer of the regulated financial institution that has not been accessed or operated for a period of two years.
In the case of fixed deposits or investments scheduled by a customer to roll over upon maturity and the roll-over has persisted for more than three consecutive roll overs or two years, a regulated financial institution shall initiate actions to re-identify the customer, renew consent to continue the instructions and update the customer’s records.
Where the regulated financial institution is unable to contact the fixed deposit account holder pursuant to subsection 7, the regulated financial institution shall transfer the funds to the dormant account register.
Also, where a customer has two or more accounts with the same regulated financial institution and any but not all of the accounts has not been operated for a period of two years, the account involved may be protected and not classified as dormant provided that the customer is notified of the inactivity of that account(s) and response received.
Creation of dormant account register
Where an account becomes dormant and the balance is less than an amount determined by the Bank of Ghana, the regulated financial institution may transfer the account to the dormant account register or close the account after due notice to the customer of the decision to close the account and transfer funds to the customer or the Bank of Ghana where the customer could not be reached.
The Bank of Ghana stated that a dormant account shall continue to be covered under the Ghana Deposit Protection Scheme until transfer to the Bank of Ghana.
Communication of the process of dormancy to clients
The directive requires a regulated financial institution to take adequate steps to contact an account holder at least three months prior to an account falling into dormancy.
Importantly, in an effort to locate a dormant account holder, a regulated financial institution shall also not disclose the account balances and any other sensitive information to any third party.
Dormant account that receives credit
The directive will require a regulated financial institution to allow credits into an account classified as dormant but in accordance with section 143(1) of Act 930 shall not permit a withdrawal until the account is reactivated.
Dormant account reactivation
The Bank of Ghana said a regulated financial institution shall take all necessary steps to identify a dormant account holder prior to initiating dormant account reactivation.
A request for withdrawal or activation of an account classified as dormant by the account holder or legal representative shall be made in writing or in a manner specified by the regulated financial institution.
Transfer of unclaimed balances to Bank of Ghana
Where an account has been in the register of dormant accounts for a period of three years and has been advertised as required, the balance on a dormant account shall be transferred to the Bank of Ghana in accordance with section 143(6) of Act 930.
Process for reclaim
The directive said a regulated financial institution shall display a poster in all banking halls on the process of reclaim of funds of dormant accounts transferred to the Bank of Ghana. This shall include information on how accounts of customers may be regarded as dormant.
Also, a regulated financial institution that receives a request from a dormant account holder of funds transferred to the Bank of Ghana shall take steps to validate and seek the claim on behalf of the claimant at the Bank of Ghana.
Penalties for non-compliance
Financial Institutions that breach provisions of this directive shall be liable to an administrative penalty of not more than ten thousand penalty units.
Notwithstanding the penalties specified, the Bank of Ghana may impose any other penalty or take any remedial action that the Bank of Ghana considers appropriate.