New regulations to protect customers

There are instances where customers' monies remain unclaimed in banks for a long time due to various reasons. The most common reasons according to records are change of residence, migration and death. Further, customers' assets such as gold and other valuables may also remain unclaimed in safety deposit boxes for a long time. When an account remains inactive for a long period of time, there could be considerable risks such as unauthorized withdrawals and misuse by those who are aware of such long outstanding deposits or assets.

The Banking Act, No. 30 of 1988, specifically requires safeguarding the interests of customers of banks, who do not have any transaction for a long period of time by introducing procedures for the treatment of unclaimed assets.

In terms of these provisions of the Banking Act, the Central Bank has issued regulations to licensed banks to protect such assets of customers. These regulations cover such deposits or assets in which the owner has not shown an interest for over 10 years, and which are defined as 'abandoned property' in the Banking Act. All licensed commercial banks holding any abandoned property are required to comply with the following:

* submit a detailed report, in the specified format, to the Central Bank on an annual basis;

* publish a notice in Sinhala, Tamil and English newspapers stating the name of the owner and particulars of the abandoned property;

* dispatch this notice by registered post to the owner's last known address;

* transfer the monies under abandoned property to special control accounts in the bank's books;

* subsequently transfer the monies maintained in Sri Lanka Rupees to a special account in the Central Bank;

* meet any subsequent claims made by the customers or other beneficiaries and report such claims to the Central Bank for reimbursement, if any.

This practice of transferring customers' unclaimed assets to a special account in the Central Bank is intended to protect the assets of such customers. Similar arrangements are made in a number of other countries to protect unclaimed assets. Any lawful owner or beneficiary of such assets can submit a claim to the respective Licensed Bank and is entitled to recover such assets. Therefore, the general public is assured of the safety of their money.