CB focus on dormant accounts

 The central Bank is working on new rules governing dormant accounts at banks in the UAE with the aim of blocking any loophole for money laundering, a senior central bank official was reported on Thursday as saying.

The central bank has conducted consultations with the country’s 23 national banks and 28 foreign units on the new system and it could be issued soon, said Hadef Al Shamsi, senior executive director for the treasury department.

“A unified system dealing with dormant bank accounts and how to classify these accounts is being prepared in consultations with banks,” Al Shamsi told the Arabic language daily Emarat Alyoum.

“The system will include comprehensive bases for the accounts left open by their owners without conducting any dealings through these accounts, which are known as inactive or dormant accounts…the system will be issued shortly.”

He said the new rules would be distributed to all banks so they will deal with dormant accounts accordingly, including the period of time needed to classify these accounts as dormant and measures taken to close these accounts.

Shamsi said the central bank, which has been in the forefront of UAE efforts to combat money laundering and funding of terrorism, views dormant accounts with “extreme importance” although no financial offences or suspicious transactions have been recorded through them.

“The aim of issuing this system is to provide a pre-emptive legal framework that will allow banks to deal with these types of accounts,” he said.

Inactive or dormant accounts are internationally classified as those which have not had any activity for a while. Many countries have set specific rules and regulations for their banks to deal with inactive and dormant accounts.

The standard amount of time for such accounts in most countries is five years although some banks use different time frames.

Inactivity means there have been no transactions such as withdrawals or deposits and this leads the account to eventually become dormant.

Follow Emirates 24|7 on Google News.