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Central Bank Issues ’Dormant Account Regulation’ |
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The Central Bank of the UAE has announced the issuance of the ‘Dormant Accounts Regulation’. This regulation applies to all banks operating in the UAE. The purpose of the regulation is to establish a framework for the control and protection of dormant funds in banks, said a CBUAE press release on Wednesday. To ensure the funds in dormant accounts are kept safe and available whenever the customer seeks repayment, banks are expected to have in place appropriate governance policies and procedures. Dormancy is refined at customer level – and not at individual account level - in this regulation. The regulation sets out the mechanism whereby customers can claim their funds from the bank and customers must be able to receive any balances that are due to them at any time, regardless of the time period the customer was dormant. Where the customer classified as ‘dormant’ remains so for a period of five years, after the last transaction on their account, then the related funds in their account(s) must be transferred to the Central Bank for safeguarding. This will not affect ownership of the account and the funds transferred to the Central Bank will always remain available to be reclaimed by the dormant customer, or his or her legal heirs, at any time through the customer bank. It is imperative that customers ensure that they do not fall ‘dormant’ in accordance with the criteria set out in this Regulation. Funds transferred to the Central Bank will no longer attract any interest payments and the Central Bank will not be liable for any such payments on the transferred funds. Also, the Central Bank will not be legally responsible, or obligated in any manner for any claim by a customer regarding interest returns, profits, or other, in relation to any funds transferred to the Central Bank. Commenting on the announcement, Mubarak Rashed Al Mansoori, Governor of the Central Bank of the UAE, said, "As part of our ongoing efforts towards enhancing our consumer protection function, we have introduced the ‘Dormant Accounts Regulation’ to ensure the security of consumers’ dormant funds. The regulation introduced will safeguard dormant accounts and will make certain that consumers are able to access them at any time." "Through this regulation, we aim to further reinforce the UAE’s position as a leading financial services provider in the region, as well as foster an ideal banking environment for consumers. Consumer protection remains a focus of our overarching strategy and we are committed to continuously enhancing our regulative provisions to safeguard consumer rights," he concluded. |
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