The government led by Prime Minister Balendra Shah announced that bank deposits that have been inactive for 10 years will be transferred to the state treasury. But According to Section 112 of the Bank and Financial Institutions Act 2073, details of accounts that have been inactive for 10 years must be sent to the National Bank.According to Section 112 of the Bank and Financial Institutions Act 2073, details of accounts that have been inactive for 10 years must be sent to the National Bank.

Kathmandu. Savers have been left in a state of shock after the Prime Minister Balendra Shah-led government announced that it would transfer the deposits of the general public that have been dormant in banks and financial institutions for 10 years to the state treasury. Point 78 of the government's 100-point governance reform list states that 'to effectively utilize the state's dormant resources, the details of the accounts of banks and financial institutions that have been dormant for 10 years or more will be collected, the amount not claimed by the heirs will be brought to the state treasury after completing the legal process, and other sources will be identified and managed within 90 days.'

Can the money in a person's personal account be transferred to the state treasury as soon as 10 years have passed since it has been dormant? What is the legal provision in this regard? How can that be done?

Although the government has said that it will transfer the dormant deposits of banks and financial institutions to the state treasury, it will also complete the necessary legal process.

However, former banker Bhuwan Kumar Dahal said that it is not easy to transfer the deposits to the state treasury because they are the money of the general public even if the accounts are dormant.

The government has said that it will transfer the deposits that have been dormant for 10 years to the state treasury. For that, Dahal said, the state can use it by making arrangements to return the funds if the depositor or the heir of the depositor demands it.

“The government cannot mobilize the funds that have been in inactive accounts for 10 years or more under the current situation,” he said. “If that is to be done, the law will have to be amended accordingly.” It would be fruitful to mobilize such financial resources for development in a way that the depositor or heir claims it.

Section 112 of the Bank and Financial Institutions Act 2073 states that banks or financial institutions must send details of deposit accounts that have not been active for 10 years or have not been claimed under this Act to the National Bank within the first month of each fiscal year.

Similarly, there is a provision that banks or financial institutions must publish a notice in a national daily newspaper once every five years about the amount to be collected. The bank or financial institution must also keep detailed details of it on its website.

“If the amount is not collected for 20 years, it will be deposited in the Banking Development Fund of the National Bank and used for banking development,” the act states. The government should amend this provision of the Act and make arrangements to transfer it to the state treasury.

Banks and financial institutions should submit details of inactive accounts to the central bank annually, but they should not classify the inactive accounts according to the period of time, said an official of the central bank.

According to the integrated directive of the National Bank, banks and financial institutions should deactivate such accounts after a period of 3 years in the case of savings accounts with no transactions, and more than 1 year in the case of call accounts and current accounts.

The directive states that while activating accounts that have been deactivated according to the policy provisions of banks and financial institutions, it is not necessary to take any other documents except the application of the concerned customer in the case of accounts that have been updated according to the customer identity policy.

The central bank has made arrangements to activate inactive accounts by updating/getting the customer identity confirmed even electronically. In case of death of the account holder, the heirs will have to take the account amount and close it, while in case of the surviving account holder, they can activate it by applying for the account holder and appearing in person.  According to the National Bank, Rs 1.6 billion has been deposited in the Banking Development Fund for accounts that have been inactive for more than 20 years.

However, there is Rs 1.80 trillion in accounts that have been inactive for more than three years. Bankers say that the accounts of people who have deposited money and gone abroad for 4/5 years are especially inactive.