Banking (Unclaimed Moneys) Regulations 1993 No. 378
EXPLANATORY STATEMENT
STATUTORY RULES 1993 No. 378
Issued by the Authority of the Treasurer
Banking Act 1959
Banking (Unclaimed Moneys) Regulations
Section 69 of the Banking Act 1959 (the Act) defines the term "unclaimed moneys" to include moneys in bank accounts that have not been operated on either by deposit or withdrawal for a period exceeding seven years (where the recording of interest earnings on an account is not considered a deposit). Subsection 69(3) requires banks authorised under the Act to transfer such moneys held in accounts with balances exceeding $100 (or such higher amount as is prescribed) to Consolidated Revenue Fund within 3 months after the end of each calendar year. Other provisions in section 69 require the Government to publish each year a list of names and other relevant information relating to people whose accounts have become subject to it. The rightful owners of such accounts may apply to their bank to have the money refunded to them.
Section 71 of the Act provides that the Governor-General may make regulations for the purposes of the Act.
In practice, approximately 40 per cent of transferred money is reclaimed within four years which indicates that a significant portion of such money is not genuine unclaimed moneys. The processing of such transfers is considerably costly both to the Government and the banks and acts as an irritant to people who have forgotten about their bank account or are unaware of the provisions of section 69. Analysis of data for the calendar years 1989 to 1992 indicates that raising the threshold from $100 to $500 would reduce the volume of accounts transferred by up to 80 per cent with potential receipts falling by less than 30 per cent (for the period analysed the net cost to revenue would be approximately $2 million). Banks will be asked to undertake that they will make significantly greater efforts than at present to track down the owners of affected accounts before these moneys are transferred to Consolidated Revenue. In this way amounts actually transferred are likely to be genuinely unclaimed moneys.
The proposed Regulations will increase the threshold of moneys in accounts which become subject to section 69 from $100 to $500.
Overview
The Banking (Unclaimed Moneys) Regulations 1993 were enacted to address the inefficiencies and costs associated with the transfer of moneys in dormant bank accounts to the Consolidated Revenue Fund under the Banking Act 1959. This regulation was made under the authority of the Treasurer and aims to streamline the process by increasing the threshold for unclaimed moneys from $100 to $500. This change was intended to significantly reduce the volume of accounts transferred, thereby cutting down on administrative costs and minimising the potential for transferring moneys that are not genuinely unclaimed. The policy objective behind this regulation was to ensure that only truly unclaimed moneys are transferred to the government, thereby making the process more efficient and less burdensome for both the government and the banks involved.
The regulation also seeks to encourage banks to make more concerted efforts to locate the rightful owners of accounts before transferring the moneys to the Consolidated Revenue Fund, thus ensuring that the transferred amounts are genuinely unclaimed. This approach was expected to mitigate the costs associated with reclaiming approximately 40 per cent of transferred money within four years, which had previously been identified as a significant financial and administrative burden. The increased threshold and the accompanying policy measures were designed to achieve a balance between reducing administrative costs and ensuring that the rightful owners of dormant accounts are not unfairly disadvantaged.
Scope and Application
The Banking (Unclaimed Moneys) Regulations 1993 govern the treatment of "unclaimed moneys" as defined under section 69 of the Banking Act 1959. These Regulations apply to authorised banks operating within Australia and require them to transfer moneys in accounts that have not been accessed for over seven years to the Consolidated Revenue Fund within three months after the end of each calendar year. The Act originally set a threshold of $100 for the amount of moneys in an account that becomes subject to this provision, but these Regulations increase that threshold to $500. This change aims to reduce the volume of accounts transferred by approximately 80%, while only slightly reducing the net cost to revenue, which has been estimated at around $2 million over the analysed period. The Government also intends for banks to make greater efforts to identify and contact the rightful owners of these accounts before transferring the moneys, thereby ensuring that only genuinely unclaimed moneys are transferred. The Regulations are made under the authority of the Treasurer and apply nationally across all states and territories of Australia.
Key Provisions
The primary operative sections of the Banking (Unclaimed Moneys) Regulations 1993 (No. 378) concern the definition and handling of "unclaimed moneys" as outlined in section 69 of the Banking Act 1959. Specifically, section 69(1) defines unclaimed moneys as funds in bank accounts that have not been accessed for more than seven years, excluding the recording of interest. Section 69(3) mandates that banks transfer these funds to the Consolidated Revenue Fund within three months after the end of each calendar year if the account balance exceeds $100, or a higher prescribed amount. This regulation also requires the government to publish annually a list of individuals associated with these accounts, allowing rightful owners to claim their moneys.
The Banking (Unclaimed Moneys) Regulations impose several obligations on the banks. Banks must identify accounts that meet the criteria for unclaimed moneys, which include accounts inactive for over seven years and with a balance exceeding the specified threshold. Following identification, banks are required to transfer the funds to the Consolidated Revenue Fund within the stipulated timeframe. Additionally, the government must publish the relevant details of these accounts annually, facilitating the process for individuals to reclaim their moneys. Banks are also encouraged to make greater efforts to locate account owners before transferring the funds to the government.
The Banking (Unclaimed Moneys) Regulations do not explicitly outline specific offences, penalties, or consequences for breach within the regulations themselves. However, under the Banking Act 1959, breaches of the requirements to transfer unclaimed moneys or to provide relevant information to the government could potentially lead to civil or administrative penalties. While the specific penalties are not detailed in the regulations, non-compliance with the Act’s provisions could result in fines or other enforcement actions as determined by the relevant authorities. It is important to note that the financial and administrative burden of processing these transfers, along with the potential for reclaiming funds by rightful owners, underscores the importance of adhering to these regulatory requirements.