The Government of Uganda has no intention of taking over or taxing unclaimed balances in bank accounts or mobile money accounts.
Therefore, media reports purporting that Government will do so are misleading. As regulator of the banking sector, Bank of Uganda (BoU) applies a set of laws to deal with unclaimed balances or dormant accounts for Supervised Financial Institutions (SFIs) and Electronic Money Issuers (EMIs) as follows:
- According to Section 119 of the Financial Institutions Act (FIA) 2004 and Section 83 of the Microfinance Deposit-taking Institutions (MDI) Act, 2003, a dormant account is one that has not had any activity for a period of two years in an SFI. This includes fixed deposit accounts that have not had any activity for 2 years following the maturity date.
- After two years of inactivity, the SFI transfers the said accounts to a separate register of dormant accounts in its books and a notice in writing of that action is sent to the depositor (customer) at his or her last known address.
- Once the dormant account has been on the register for three years, the Supervised Financial Institution advertises this fact in the print media. It should be noted that any account may be transferred out of the register of dormant accounts if the depositor or, if the depositor is dead, his or her legal representative, makes such a request.
- Unclaimed balances shall after a period of five years from the date of the advertisement be transferred to Bank of Uganda.
- The public should note that the Bank of Uganda shall refund any unclaimed balances to the depositor of those balances with the Supervised Financial Institution or, if the depositor is dead, his or her legal representative, if a request is made after the dormant account has been transferred to the Bank of Uganda.
- For purposes of electronic money (mobile money), Section 57 of the National Payment Systems (NPS) Act, 2020 made similar provisions. The Public should note that the NPS Act 2020 gives Bank of Uganda the mandate to regulate Electronic Money Issuers.
- According to Section 57 of the NPS Act 2020, a dormant account is one that has not had any activity for a period of nine (9) consecutive months. The Electronic Money Issuer shall give notice to the customer at least one (1) month before the expiry of the nine (9) months.
- At the expiry of the nine (9) months [including the one (1) month notice period], the e -money account will be suspended and subsequently blocked. Five (5) days after blocking the e-money account, the Electronic Money Issuer shall give notice to the customer that the account is blocked and provide instructions on how the account can be activated.
- If the account is not activated within six (6) months after it has been blocked, the Electronic Money Issuer shall close the e-money account. Upon the closure of the e -money account, the trustees shall transfer the balance on the Electronic Money Account and the identification information of the relevant customer to Bank of Uganda.
- Bank of Uganda shall pay unclaimed balances to the customer if the claim is made within 7 years; If the account owner is deceased, their legal representative, or administrator of his estate shall make such a claim.
- Bank of Uganda shall after those 7 years, if unclaimed, transfer the unclaimed balances to the Consolidated Fund.
- The public is informed that there is a period of up to 10 years within which to rectify the issue of unclaimed balances on your accounts held with Supervised Financial Institutions. Customers, who hold accounts with Electronic Money Issuers, have a total of 8 years and three months within which to deal with the issue of dormant accounts.
As such, Bank of Uganda assures the public that Government will not take over your unclaimed balances that are lying idle on your accounts held either with Supervised Financial Institutions or with Electronic Money Issuers.
Bank of Uganda is pleased to clarify matters related to the delivery of its statutory functions and mandate of fostering price stability and a sound financial system.