Kathmandu, April 1: The government plans to claim funds from bank accounts inactive for 10 years or more as part of its 100-point reform agenda. Cabinet sources say the measure is expected to be implemented within 90 days.
Currently, Nepalese law prohibits the state from transferring individuals’ bank balances to the treasury. The current Banking and Financial Institutions Act permits the transfer of accounts inactive for 20 years to the central bank’s “Banking Development Fund.” Reducing the threshold to 10 years and diverting funds to the state treasury would require amending the act—a process involving the central bank, Finance and Law Ministries, and Parliament. Officials warn that meeting the 90-day target is unlikely.
Under current rules, a savings account is deemed inactive after three years without transactions and a current account after one year. Banks must first publish national notices inviting account holders to claim funds. Accounts inactive for 10 years are then reported to the central bank. If inactivity reaches 20 years, the balance is transferred to the Banking Development Fund, which currently holds about Rs 1.6 billion. Of this, only Rs 7 crore comes strictly from inactive accounts.
Bankers stress that any government use of such funds must safeguard the right of account holders to reclaim their money, including accrued interest. Nabil Bank CEO Manoj Gyawali emphasized that funds in limbo can be utilized, but repayment to rightful owners must remain guaranteed.
Other countries follow similar practices. In India, balances inactive for 10 years are moved to the central bank’s “Depositor Education and Awareness Fund,” with repayment and interest guaranteed. In the UK, such funds go to the government-managed Reclaim Fund. In the US, a national unclaimed property administrator helps citizens locate inactive assets; some states allow government use, but the owner’s claim remains protected indefinitely.
Nepalese authorities say any move to reduce the inactivity period and divert funds to the treasury will follow legal amendments, ensuring account holders retain their rights.
People’s News Monitoring Service
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