Kathmandu. Interest in dormant accounts has increased among the general public as the government is preparing to transfer the money from the bank accounts that have not been in use for a long time to the state treasury. Customers who have not made any transaction even after keeping money in their accounts for years are now going to the bank and re-activating their accounts. It has also significantly increased the number of service seekers in the bank branches.
According to the bank’s staff, the number of customers activating inactive accounts has increased significantly in recent days. According to the bank’s staff, about 40-50 customers come to a branch every day for this purpose.
Such service seekers, who used to come normally earlier, have now reached the point of standing in line. The government’s announcement appears to have created psychological pressure to reactivate accounts that have long been neglected.
The agenda for governance reforms, unveiled after the formation of the new government, includes a plan to collect money from accounts that have been dormant for more than 10 years and bring them back to the state treasury. It aims to mobilize large amounts of money that are lying idle within the banking system. For this reason, Nepalis not only inside the country but also abroad have increased contact with banks and financial institutions to know the status of their accounts and to know the necessary process.
According to the existing directives of Nepal Rastra Bank, a savings account is considered inoperative if there is no transaction for 3 years and no transaction in a current account for 1 year. Currently, there are about Rs 1.88 trillion deposited in these inactive accounts. Of this, it is estimated that around Rs 20 billion could be in accounts that have not been in circulation for more than 10 years. However, the process of collecting the exact details is ongoing.
According to the current law, such money cannot be transferred directly to the state treasury. The Bank and Financial Institutions Act (BAFIA) has a provision to send the details of the accounts that have not been in operation for 10 years to the Rastra Bank, to issue public notices from time to time and to deposit the unclaimed amount in the Banking Development Fund even after 20 years. There is a provision that the amount reached in the fund can also be returned to the concerned person if the demand is made later with evidence. So far, around Rs 1.67 billion has been collected in the fund.
In such a situation, it is necessary to amend the existing legal framework to implement the decision of the Council of Ministers. Without changing the law, there will be legal complications to transfer the amount of the inactive account directly to the government treasury.
The process of resuming an inactive account is relatively easy. After the account holder presents the application at the bank, the account is reactivated in case the required customer details (KYC) are updated. Some banks are also developing a facility to complete this process online. This is expected to provide more convenience to the customers.
