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Sunday, September 11, 2016

Sri Lanka Central Bank Central Bank regulations on abandoned property

Do be careful about your Non-Operative Sri Lanka accounts. Please check with your local banker.

BANKING ACT DIRECTIONS NO.5 OF 2009

IDENTifYING, REPORTING, TRANSFERRING AND MAINTAINING
ABANDONED PROPERTY OF LICENSED COMMERCIAL BANKS

In the exercise of the powers conferred by Sections 72 to 76 of the Banking Act No. 30 of 1988, last amended by the Banking (Amendment) Act No. 46 of 2006, the Monetary Board hereby issues these Directions under provisions of Section 46(1) of the Act in respect of identifying, reporting, transferring and maintaining abandoned property of licensed commercial banks.
1.These Directions may be cited as the Banking Act Directions No. 5 of 2009.
The Sections referred to in these Directions are those of the Banking Act No. 30 of 1988, last amended by the Banking (Amendment) Act No. 46 of 2006.
2(1) In terms of Section 73(1), all licensed commercial banks holding any articles defined as abandoned property in Section 72 of the Banking Act,shall submit a report to the Monetary Board on an annual basis, within six months from the end of each financial year. Licensed commercial banks shall report abandoned property in accordance with the format at Annex I.
2(2) If there is no abandoned property identified by a licensed commercial bank during a financial year, the respective licensed commercial bank shall formally communicate this fact to the Central Bank of Sri Lanka. Such communication will be considered as a ‘Nil’ report.
2(3) Pursuant to filing of the report on abandoned property, licensed commercial banks shall maintain documents necessary to substantiate the information submitted in the report for a period of at least ten years from the date of submission.
3(1) In terms of Section 74 of the Banking Act, all licensed commercial banks shall, within 30 days of submitting the report required under Direction 2(1) above,
(i) publish a notice in Sinhala, Tamil and English daily news papers stating the name of the owner and particulars concerning the property, and
(ii) dispatch by registered post, a notice containing the particulars of such property to the owner’s last known address.
Citation.
Reporting of abandoned property to the Monetary Board.
Publication of the notice on abandoned property.
Directions, Determinations, and Circulars issued to Licensed Commercial Banks 327
3(2) All licensed commercial banks shall confirm in writing to the Central Bank of Sri Lanka of compliance with these requirements, within seven working days from the date of publishing and despatching such notices.
4(1) All licensed commercial banks shall create “control accounts” for abandonedproperty, based on the currency, in the banks’ books and shall transfer tocontrol accounts all monies reported to the Monetary Board as abandonedproperty in accordance with Direction 2(1) above.
4(2) All licensed commercial banks shall transfer monies that have already beenreported to the Monetary Board as abandoned property in accordance with theCircular dated 2 May 2006, to the “control accounts” referred to in Direction4(1) above, within seven working days from the date of this Direction.
5(1) In terms of Section 73(2) of the Banking Act, the Monetary Board hasdetermined that licensed commercial banks shall transfer ninety per cent ofthe monies reported as abandoned property, maintained in Sri Lanka Rupees(LKR) in a control account, to a special account in the Central Bank of SriLanka, within forty five calendar days from the date of reporting the abandoned
property each year.
5(2) Licensed commercial banks shall transfer ninety per cent of monies that havealready been reported as abandoned property in accordance with the Circulardated 2 May 2006, maintained in LKR, and the interest on such moniescalculated up to the date of transfer, to a special account in the Central Bank of
Sri Lanka, within thirty calendar days from the date of this Direction.
5(3) Licensed commercial banks shall transfer the monies reported as abandonedproperty referred to in Directions 5(1) and 5(2) above to the following accountin the Central Bank of Sri Lanka, and notify it in writing to the Chief Accountantof the Central Bank with a copy to the Director of Bank Supervision.
Name of Account : Abandoned Property of Licensed Commercial Banks
Account Number : 4679
6(1) Ten per cent of the monies reported as abandoned property maintained inLKR, remaining after the transfer as specified under the Direction 5(1), andabandoned property maintained in foreign currency shall be retained in the
“control accounts” of licensed commercial banks referred to in Direction 4(1)above. These monies shall be utilised to meet any claims on the abandonedproperties, upon the licensed commercial banks satisfying themselves of theidentity of the claimants.
6(2) Once a payment is made in terms of Direction 6(1) above, licensed commercialbanks shall report it to the Central Bank of Sri Lanka within seven days fromthe date of such payment, along with relevant information, i.e., details of theowner, description of property, date of reporting of such abandoned property,amount of payment and date of payment. All licensed commercial banks shall
prepare a report of such repayments on an annual basis and submit the samewithin six months of the end of each financial year, in accordance with thereporting format at Annex II, along with the report referred to in Direction 2(1)above.
Transfer ofabandonedproperty to “control
accounts”.
Transfer of moniesto a specialaccount in theCentral Bank.
Repaymentof claims.
328 Directions, Determinations, and Circulars issued to Licensed Commercial Banks   ;
6(3) Any claims in LKR made in excess of ten per cent of the funds retained in therespective control account by the licensed commercial bank, will be repaidby the Central Bank of Sri Lanka in terms of the provisions of Section 75 ofthe Banking Act. When any such claim is made, licensed commercial banksforward the same to the Central Bank of Sri Lanka, along with a lettecertifying the identity of the owner of such abandoned property.
7(1) Licensed commercial banks shall prepare a Safe Deposit Inventory Sheet torecord the details of safe deposit boxes opened. Opening of safe deposit boxesshall be carried out in the presence of two responsible officers who are, interalia,specifically assigned with such task and one of whom should be at leastat Senior Executive level. All items contained in safe deposit boxes that are
considered to be abandoned, shall be included in the Inventory Sheet withoutexceptions. All items contained in the safe deposit boxes shall be itemised andkept in safe custody after opening the safe deposit boxes. No item should besold, destroyed or disposed of.
7(2) The Inventory Sheet shall be signed by the officers mentioned in Direction7(1) above. The Safe Deposit Inventory Sheet shall be prepared in accordancewith the instructions to these Directions and reporting format at Annex III andsubmitted to the Monetary Board within six months of the end of each financialyear, along with the report on abandoned property referred to in Direction 2(1)
above.
8 In view of the introduction of this Direction, Circular Letter
No. 02/17/402/0079/001, dated 2 May 2006, titled Implementation of theprovisions of Sections 72 to 76 of the Banking Act on Abandoned Property’ ishereby revoked with respect to its applicability to licensed commercial banksand without prejudice to anything duly done under or in terms of such Circular
Letter.
Opening of Safe
Deposit Boxes.
Revocation.
Determinations, and Circulars issued to Licensed Commercial Banks
Instructions for completing the Annexures on Abandoned Property
In terms of Section 73(1) of the Banking ActDetails of the property, as defined in terms of Section 72 of the Banking Act, should be recorded inalphabetical order of the owners’ last name, to the extent possible, branch wise and currency wise.
Name of Bank : Enter the name of the reporting Licensed Commercial Bank.
Reporting Date : Enter the date as at when the reporting is done
(last calendar day of the financial year).
(18.1.0.0.0.0) Enter the name of the branch in which the customer account is held.
(18.2.0.0.0.0) Enter the owner’s last name followed by the first name and middle name/s infull. Enter information that would aid in identification such as Miss, Mr., Mrs.,after the middle name.
If a single item has two or more owners, the names of all such owners must bereported, with the relationship.
If your records do not show the name of the owner of an item, enter the owneras “unknown”.
(18.3.0.0.0.0) Enter the complete address available in your records. If no address is available,indicate this fact. In the case of several owners, if the address is the same, theaddress may be entered once and indicated that it is the same for the others.
(18.4.0.0.0.0) Enter the owner’s National Identity Card No., Passport No., Date of Birth orany other information that will assist in identifying the owner. These will beessential at the time of paying claims and if known, must be included in thereport.
(18.5.0.0.0.0) Select the description of the item from the list or, if it is not available, enter thedescription with sufficient detail.
(18.6.0.0.0.0) Enter your identification number for each item such as Account No., etc.
(18.7.0.0.0.0) Select whether the item is interest bearing or not.
(18.8.0.0.0.0) Indicate the date when the last deposit, withdrawal or contact was made by theowner. It could also be the date a dividend became payable, cheque or draft wasissued, certificate was purchased etc.
(18.9.0.0.0.0) Indicate the nature of the last activity. E.g. A withdrawal, a deposit to theaccount etc.
(18.10.0.0.0.0) Select the currency in which the account is maintained from the list or, if it isnot available, enter the relevant currency.
(18.11.0.0.0.0) Indicate the total amount due to the owner, including all interest, dividendsetc., earned up to the reporting date, without deducting any service charges. Inthe case of safe deposit boxes or other items held for safekeeping, identify the
contents and include the description of any item that has a value. For all safedeposit boxes, include an inventory sheet as in Annex III.
(18.12.0.0.0.0) Enter the amount of deductions made which should include only any lawfulcharges.
(18.13.0.0.0.0) Indicate the nature of any deduction made such as service charges, tax etc.
(18.14.0.0.0.0) The net amount due after the deductions mentioned.
(18.15.0.0.0.0) Indicate the exchange rate applicable in the case of any currency other thanLKR, as at the end date of the reporting period.
Directions, Determinations, and Circulars issued to Licensed Commercial Banks 333
(18.16.0.0.0.0) The net amount due in LKR.
(18.17.0.0.0.0) Indicate the terms agreed with the owner, such as interest rate, paymentinstructions etc., that will be essential in the case of any payment of claims. Alsoindicate any special considerations attached to such property and the date of
maturity in the case of term deposits.
(18.18.0.0.0.0) Total of the net amount due in LKR in (18.16.0.0.0.0).
(18.19.0.0.0.0) Indicate the year of reporting/identifying the particular property as abandonedproperty in reporting to CBSL.
(18.20.0.0.0.0) Indicate the date of settlement of the claim to the customer.
(18.21.0.0.0.0) Indicate the full name(s) of the owner(s) including information useful for identifyingthe owner.
(18.22.0.0.0.0) Indicate the safe deposit box number.
(18.23.0.0.0.0) Indicate the place at which the vault containing the safe deposit is located.
(18.24.0.0.0.0) Indicate the date the safe deposit was opened.
(18.25.0.0.0.0) Indicate the quantity of items in the safe deposit box.
(18.26.0.0.0.0) Indicate the nature of each item contained in the safe deposit box.

(18.27.0.0.0.0) Indicate any other relevant information.

1 comment:

  1. Thanks, Lucky! But I didn't understand this much and its significance. I suppose it is for those who own 'stuff' in Sri Lanka and have allowed it to go into disuse. Fortunately I have nothing like that to worry about. But you have done a great service informing those who do own 'stuff'. Thanks again from Zita

    ReplyDelete