The Unclaimed Balances and Dormant Accounts Directive

In 2021, the Bank of Ghana, established guidelines for the management of dormant accounts and unclaimed funds held by banks and specialized deposit-taking institutions. Under these directives, an account is deemed dormant if there is no customer-initiated activity for two years and banks are required to maintain a register of all Dormant Accounts.

Banks are also required to notify account holders before their accounts are declared dormant, ensure proper communication for account reactivation, and publish dormant accounts that remain inactive for three years in national newspapers.

Unclaimed funds in these bank accounts after the publication should be transferred to the Bank of Ghana, where account holders or their representatives can subsequently claim without interest.

The directive also outlines penalties for non-compliance and emphasizes the protection of customers’ funds while establishing clear procedures for reclaiming dormant account funds.

What About Digital Money?

Given the widespread use of mobile and electronic money in Ghana, the Bank of Ghana issued similar guidelines to regulate dormant electronic money accounts and unclaimed funds in 2022. Examples of mobile and electronic money include MTN Mobile Money, Telecel Cash, AT Cash, Cryptocurrencies etc.

These regulations are::

• A period of twelve (12) consecutive months of inactivity renders an electronic money account dormant.
• Service providers licensed or authorized[1] to issue electronic money are required to:

1. contact the account holder not less than one month before the account is designated as dormant,
2. provide and maintain a register of all unclaimed funds until such a time that the funds have been claimed by the dormant electronic account holder or their legal representatives.

• In the event the Service Providers are unable to contact the account holder, they may contact the Next-of-Kin or other person designated by the account holder without disclosing the electronic account balance(s).

Recommendations:

Although the processes currently in place are meant to prevent or reduce fraud, they are quite cumbersome and expose the grieving family to further physical, emotional and financial burden. In order to ease the estate administration process without sacrificing its integrity, the following are recommended:

1. The National Identification Authority, the Births and Deaths Registry, the Ghana Association of Bankers, and banks/financial institutions should collaborate and work towards developing a centralized digital system where applicants for LA/Probate are able to conduct a search to determine the bank accounts held by a deceased person. As discussed above, it is a challenge to determine the specific banks deceased persons held accounts in their lifetime. Measures such as the use of secure platforms, requirement for the production of specific identification documents (e.g., death certificates, proof of identity, and relationship to the deceased) may be used to prevent abuse of such a platform.
2. The Judiciary and the Ghana Bar Association, in partnership with banks and financial institutions, should establish guidelines to simplify the process for executors or administrators to verify the accounts and account balances of deceased persons. This will help to reduce the difficulties and stress associated with accessing such funds.

• The rules of the court should make it possible for beneficiaries who are unable to pay the estate tax upfront to have the estate tax deducted from the estate. By so doing, the beneficiaries who may be pinching pennies will be relieved of the onerous burden of raising funds to pay the estate tax. This service could come at an extra fee.

1. The policy of non-payment of interest by the Bank of Ghana when funds are re-claimed should be re-considered especially for funds held in local currency. Given the very unstable nature of the local currency, the funds should be put into an interest-yielding account so that in the event they are re-claimed, there is at least no loss in value.
2. The challenges discussed above are more pervasive when the deceased died intestate. For varied reasons, Africans are averse to making wills. Whatever the reasons may be, it is highly recommended that people make wills in order to control the distribution of their assets and protect their loved ones after their demise.

Conclusion

As Cicero famously said in his book “De Legibus”; “the welfare of the people is the highest law”. This underpins the fact that the law was made to benefit rather than burden man. Accordingly, the law must be used as a tool to promote the advancement of society and not to thwart it.

While he walked this earth, he hid his chest,

For reasons he alone knew best.

But wherever he rests in realms above,

He’d wish his treasures found by love—

By those who knew his heart’s true quest,

     Not locked away in a bank’s dark chest.

[1] Under the Payment Systems and Services Act, 2019 (Act 987)