Tuesday, Nov 20, 2018
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Dormant account cash to go to treasury

Amendments could lead to govt windfall
The Central Bank of The Bahamas. FILE

Government yesterday introduced amendments to the Banks and Trust Companies Regulation Act and one to amend the Central Bank of The Bahamas Act to allow the money in dormant accounts held in banks to be transferred to the treasury.

According to the Central Bank of The Bahamas’ 2017 annual report, as of 2017 as much as $81 million sits in more than 41,000 dormant accounts, including $50 million in more than 7,000 U.S. dollar accounts alone.

According to Governor of the Central Bank John Rolle, these funds are currently managed by the Central Bank until the owners show up and claim them. “In some cases this never happens,” said Rolle.

The bills regarding dormant accounts were tabled in the House of Assembly yesterday.

And according to those bills, types of accounts that will be transferred to the treasury when dormant for a period of seven years or more include, deposit accounts, demand, savings, and fixed term; checking accounts; a bank draft, cashier check, certified check or money order; a traveller’s check; a credit balance on a credit card; a credit balance on a loan; collateral held on a loan, including cash and non-cash collateral; funds paid for shares or other interest in a licensee; a custody account of safety deposit box; a deposit account of precious metals and precious gemstones; “all securities listed in Part one of the First Schedule to the Securities Industry Act”; and “such other deposit account or other facility as the governor (of the Central Bank), may by notice, determine”.

According to the Banks and Trust Companies amendment a dormant account will mean the customer has not initiated a transaction for a period of seven years.

When that seven years has arrived, according to the Banks and Trust Companies amendment, the account holding bank must pay to the Central Bank “an amount equal to and in the same currency denomination as the amount owing by the bank in respect of the dormant account, including cash from a dormant safety deposit box, or liquidate a dormant account, including a safety deposit box, containing precious metals, precious gemstones or securities and after deducting the reasonable costs incurred in connection with the liquidation of the account”, and pay the balance of the proceeds to of the liquidated goods to the Central bank.

The Banks and Trust Companies amendment bill also requires the bank to retain the records of the dormant account for 15 years after the proceeds of that account are turned over to the Central Bank. It also removes from liability regarding the transfer of those funds to the Central Bank, the account holding bank, registrar or transfer agent and “any other person acting for or on behalf of the bank”. When it comes to securities, the amendment calls for records to be held for 17 years.

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