The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank is mulling legislative reforms that would transfer 79 per cent of existing dormant account balances to the Treasury within two months of receiving them.

The monetary policy regulator, in its annual report, revealed that all dormant accounts with balances under $500 will be earmarked for rapid transfer to the Public Treasury via the proposed reforms to the Central Bank of the Bahamas Act and Banks and Trust Companies Regulation Act.

Based on data contained in the Central Bank’s annual report, 79 per cent of the 37,900 dormant accounts it currently holds have balances below $500. These collectively $3.4 million, and 81.3 per cent of this sum - $2.8 million - are denominated in Bahamian dollars.

“In 2014, some 89 licensees transferred a total of 1,054 dormant accounts, denominated in six currencies, and totalling the equivalent of $3.9 million,” the Central Bank said.

“At end-2014, the cumulative dormant account balances, inclusive of investment returns, aggregated $86 million, of which US dollar and Bahamian dollar denominated accounts represented 53 per cent and 30 per cent, respectively.”

Dormant accounts are currently transferred to the Central Bank by its commercial and bank and trust company licensees when there is no customer activity for seven years, and the beneficial owner cannot be contacted.

The Central Bank said the proposed reforms were in response to industry concerns, and designed to “fill gaps in the law” and “effect general improvements in the administrative regime”.

The amendments allow all dormant account balances in excess of $500 or more to be transferred from the Central Bank to the Public Treasury after 25 years. No person will be able to claim a dormant account after that time.

Criminal penalties will be implemented for persons making “fraudulent claims” on dormant account balances, and the Central Bank will be able to “charge an administrative fee” for managing these accounts and determine the interest payable on them.

The amendments will also “expand the types of accounts and facilities that are subject to the dormant accounts regime to include, chequing accounts, payment instruments, collateral held on loans, safety deposit boxes, balances on credit cards and loans, and securities accounts, which are to be liquidated and the proceeds transferred to the Central Bank”.

Banks will also have to adopt enhanced recordkeeping and reporting requirements related to dormant accounts.

The Central Bank said it expected the proposed reforms to become law in 2015.