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Julian Manduca
Malta’s banks, like banks all over the world, are able to benefit from income on their investments of dormant bank accounts. When MaltaToday asked HSBC, BOV and APS how much money they held in a dormant state, none of the banks disclosed the amounts.
While the money remains with the bank in the names of its customers, often earning interest, the banks are able to use those funds to earn money by investing it.
So-called dormant accounts arise because it is quite common over a period of many years that a person will open a bank account, deposit money, and then disappear into the ether.
Banks are not always able to trace or find out what has become of their silent customers. They also have difficulty knowing whether they should follow up requests from people who claim to be heirs to the accounts.
According to Swiss lawyers Micheloud and Co, the problem is most acute when customers go abroad. “The main problem is that the customer resides abroad and, due to bank secrecy, the bank cannot publish notices in the international press to locate the depositors.
“This has led the majority of Swiss banks to refrain from opening small-deposit accounts for foreign customers, for fear that they will forget that the account exists.”
That policy is not followed in Malta and from time to time customers pass away and their heirs can sometimes neither prove the death, nor their heirship.
According to the lawyers: “This was a frequent occurrence during the wartime periods, and the banks have now set up a simple, rapid resolution procedure operating to their customers’ advantage.”
Micheloud and Co define dormant assets as “any assets deposited with a bank (an account, a custody account or a safety-deposit box) for which there has been no contact with the customer in the bank’s files for the last ten years or more.”
Swiss banks offer a fairly simple service which allows people to trace dormant accounts.
When MaltaToday asked HSBC what its procedure was in respect of dormant accounts, Senior Communications Manager, Marco Grech said: “An account is classified by the bank as unclaimed in order to apply to it a higher standard of diligence as a precaution against the possibility of fraud once it becomes clear that the account holder appears to have lost interest in the account.
“There is no law governing said accounts but the bank can never consider these accounts or the money therein as its own as it continues indefinitely to regard the money in said accounts as owing to the account holder and consequently prescription never commences to run against the account holder. In the bank's balance sheet, these balances are shown under customers funds.”
Bank of Valletta’s head of PR and Corporate Branding told MaltaToday: “If an account is ‘dormant,’ the money remains deposited in the customer’s account until it is claimed by its rightful owner/s and, in the case of interest bearing deposit accounts, interest keeps on being credited to such accounts.
BoV would not let on as to how much money is kept in a dormant state: “Kindly note that we consider the information you requested regarding the amount held in such accounts as confidential information and, consequently, we regret to inform you that this cannot be disclosed.”
While HSBC and BOV would not reveal the value of its dormant accounts, the Church’s APS Bank was much less forthcoming and in reply to several questions about its policy on dormant accounts, sent this reply: “What you are enquiring on is about information of a confidential nature which the bank feels it should not divulge to anyone.”
When MaltaToday re-iterated that it was not after names or amounts accruing to individuals, but was only interested in the bank’s policy, APS’s marketing head Andrew Attard replied: “I appreciate your point. As you can see by yourself, yes, the bank’s policies are confidential.”
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