Commonwealth Numbered Regulations - Explanatory Statements

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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.


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