Banking Amendment Regulation 2013 (No. 2)

Overview

The Banking Amendment Regulation 2013 (No. 2) was enacted to address a specific problem within the framework of the Banking Act 1959. This regulation was introduced to provide clarity and ease of process for account holders in relation to the classification of their accounts as unclaimed. The regulation was issued by the Authority of the Treasurer and made under subsection 69(1D) of the Banking Act, which allows for the specification of accounts that are exempt from the unclaimed moneys provision. By allowing account holders or their agents to notify their authorised deposit-taking institution (ADI) within the last three years of their intention to keep their account active, the regulation aims to prevent accounts from being prematurely classified as unclaimed and subsequently transferred to the Commonwealth. This legislative instrument was developed in consultation with relevant industry groups, including the Australian Bankers’ Association and Abacus, and it commenced on 1 July 2013. The regulation ensures a streamlined process for account holders to maintain control over their accounts, thus avoiding unnecessary complications and administrative burdens.

Scope and Application

The Banking Amendment Regulation 2013 (No. 2) amends the Banking Regulations 1966 under Section 71 of the Banking Act 1959, which allows for the prescription of matters required or permitted by the Act. This regulation applies to account holders and their agents, such as advisors, agencies, guardians, and authorised users, who have notified their authorised deposit-taking institutions within the last three years of their intent to keep their accounts active. This notification exempts these accounts from the unclaimed moneys provision outlined in subsection 69(1). The scope of this regulation is national, operating under the Commonwealth jurisdiction and affecting all authorised deposit-taking institutions in Australia. It comes into effect on 1 July 2013 and can be applied through various contact methods, including mail, email, in person, by phone, or any other method acceptable to the authorised deposit-taking institution. Treasury consulted with the Australian Bankers’ Association and Abacus, industry groups representing authorised deposit-taking institutions, in developing this regulation. The regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003, and it has been deemed compatible with human rights under the Human Rights (Parliamentary Scrutiny) Act 2011.

Key Provisions

The Banking Amendment Regulation 2013 (No. 2) makes specific changes to the Banking Regulations 1966 under the authority provided by section 71 of the Banking Act 1959. This amendment is aimed at providing clarity and convenience to account holders who wish to keep their accounts active and avoid the classification of their accounts as unclaimed. Specifically, Regulation 3, through Schedule 1, specifies that the unclaimed moneys provision in subsection 69(1) will not apply to accounts where the account holder or their authorised agent has notified their authorised deposit-taking institution (ADI) within the last three years that they wish to keep the account active (Regulation 3, Schedule 1). This notification can be made through various methods such as mail, email, in person, by phone, or any other method acceptable to the ADI, ensuring flexibility for account holders in communicating their intentions. The Banking Amendment Regulation 2013 (No. 2) imposes specific obligations on account holders and ADIs. Account holders are required to notify their ADIs within the last three years if they wish to keep their accounts active, thereby preventing the accounts from being classified as unclaimed. This notification can be made through various acceptable methods. ADIs, on the other hand, must accept and process these notifications to ensure that the accounts remain active and are not transferred to the Commonwealth as unclaimed moneys. The Regulation aims to streamline the process for account holders to maintain active status for their accounts and reduces the administrative burden on both parties. The Regulation does not explicitly outline specific offences, penalties, or consequences for non-compliance. However, failure to notify the ADI within the specified period could result in the account being classified as unclaimed, leading to the transfer of funds to the Commonwealth. This outcome is implicit in the necessity for account holders to actively manage their account status. Although the Regulation itself does not detail penalties for non-compliance, the Banking Act 1959 or other related legislation may provide for such consequences, ensuring that the provisions are adhered to for the protection of both account holders and financial institutions.