Regulatory Alerts2014-01-01
Treatment of Unclaimed Funds for Payment System Businesses
The Bank of Zambia mandates payment system businesses to identify and relinquish unclaimed electronic money to the central bank after one year of inactivity or failed customer notification. Institutions must transfer these abandoned funds within thirty days, maintain supporting records for six years, and immediately clear existing balances upon the directive's effective date. Claimants retain a six-year window to recover relinquished funds, after which legal recourse against both the issuing institution and the Bank is barred unless the Bank exercises its discretion to prevent hardship.
BANK Of ZAMBIA OFFICE OF THE DEPUTY GOVERNOR - ADMINISTRATION 5 September, 2014 CB Circular No: 23/2014 TO All Payment System Businesses including Electronic Money Issuers and Money Transfer Businesses TREATMENT OF UNCLAIMED FUNDS FOR PAYMENT SYSTEM BUSINESSES The Bank of Zambia has noted the increase in the amount of unclaimed funds for Payment System Businesses such as Electronic Money Issuers and Money Transfer Businesses. The purpose of this circular is thus to give guidance on the treatment of unclaimed funds for Payment System Businesses. The following shall be the procedures to be followed in treating abandoned or unclaimed funds: (1) Any e-money held by an e-money institution shall be presumed abandoned upon the expiration of one year if there has been no customer initiated transactions on the ewallet and the person in whose name the e-money is held does not respond to. a notice sent by the e-money institution; (2) An e-money institution holding e-money presumed abandoned shall relinquish the funds to the Bank within thirty days after the e-money is deemed abandoned; (3) An e-money institution holding abandoned e-money at the time of coming into effect of these directives shall immediately relinquish such funds to the Bank; (4) An e-money institution that relinquishes funds to the Bank under (2) and (3) above shall retain the records concerning the relinquished funds for 6 years; (5) A person whose e-money has been relinquished to the Bank in accordance with this circular may claim the funds from the Bank within a period of six years from the date of receipt ofthe funds by the Bank; (6) No action to recover, and no other action in respect of any funds presumed abandoned and paid in or relinquished in accordance with this circular may be brought against the paying e-money institution or against the Bank after the sixth year following payment or relinquishing to the Bank, but where the Bank considers it desirable, to avoid hardship or injustice, the Bank may make a payment to a claimant in respect of emoney presumed abandoned to that person. Bank Square, Cairo Road, P.O. Box 30080, Lusaka, Zambia. Tel: +260-211-229930 Fax: +260-211-222808 E-mail: tkmabula@boz.zm. Web: http.z/www.boz.zm
Kindly be guided accordingly. D~bUla DEPUTY GOVERNOR - ADMINISTRATION Cc Governor Deputy Governor - Operations »: Senior Director - Supervisory Policy Director - Banking, Currency & Payment Systems Bank Square, Cairo Road, P.O. Box 30080, Lusaka, Zambia. Tel: +260-211-229930 Fax: +260-211-222808 E-mail: tkmabula@boz.zm. Web: http://www.boz.zm