Regulatory Instructions for Dormant Accounts

In light of the need to clarify the regulatory framework for dormant accounts and to align with international best practices, the Central Bank of Egypt has issued these regulatory instructions to define dormant accounts and regulate their management.

These instructions shall apply to all banking institutions as of July 27, 2021:

1. Definitions

Banks must adhere to the following definitions:

1-1 Dormant Account: An account is considered dormant if it has been inactive for a period of two years for general accounts and one year for simplified customer accounts (accounts with low balances or those managed under simplified customer due diligence procedures). Inactivity is defined as the absence of any customer-initiated transactions, deposits, or withdrawals, excluding automatic interest accruals or bank-initiated fees.

2-1 Customers with Dormant Accounts: Customers whose accounts have been classified as dormant.

3-1 Active Account: An account is considered active if there has been at least one customer-initiated transaction (deposit, withdrawal, transfer, etc.) within the last one year for general accounts and two years for simplified customer accounts. Transactions initiated by the bank (such as fee deductions or interest crediting) do not count as activity.

4-1 Reactivated Simplified Account: A simplified account is considered reactivated if the customer performs a transaction that brings the balance above the threshold defined for simplified accounts, or if the customer updates their information and the account is no longer subject to simplified procedures.

2. Reactivation of Dormant Accounts

1-2 Reactivation by the Customer: Customers may reactivate their dormant accounts using any of the bank's communication channels (e.g., ATM, internet banking, mobile banking, branch visit, call center, or agent banking).

2-2 Simplified Accounts: For simplified accounts, reactivation requires the customer to perform a transaction or update their information at a branch, via internet banking, mobile banking, or call center.

3-2 An account is considered dormant if it meets the criteria in sections 1-2 and 2-2. If a customer requests reactivation, the bank must process it immediately.

4-2 Banks must ensure that dormant accounts are clearly identified and that customers are informed of their status.

5-2 Banks must ensure that dormant accounts are not charged fees that would further reduce the balance, unless explicitly agreed upon by the customer.

3. Customer Notification

1-3 Banks must notify customers whose accounts are dormant via SMS, email, or other electronic means at least three months before the account is officially classified as dormant.

2-3 Notifications must include the account status, the reason for dormancy, and instructions on how to reactivate the account.

3-3 If the customer does not respond or reactivate the account within the specified period, the bank may classify the account as dormant and apply the relevant regulations.

4. Protection of Customer Rights

1-4 Banks must ensure that dormant accounts are protected and that customers' rights are not violated. Customers must be able to access their funds upon reactivation without unnecessary restrictions.

2-4 Banks must not charge fees for dormant accounts unless explicitly agreed upon by the customer. Any fees charged must be transparent and clearly communicated to the customer.

3-4 Banks must ensure that dormant accounts are not used for any illegal activities and that customer data is protected.

4-4 Banks must ensure that dormant accounts are not transferred to third parties without the customer's consent. Any transfer must be done in accordance with the law and with the customer's explicit permission.

5-4 Banks must ensure that dormant accounts are not subject to any legal actions without the customer's knowledge. Any legal action must be done in accordance with the law and with the customer's explicit permission.

5. Supervision of Dormant Accounts

1-5 Banks must monitor dormant accounts and ensure that they are managed in accordance with these instructions. Banks must report any irregularities to the Central Bank of Egypt.

2-5 The Central Bank of Egypt will supervise banks' compliance with these instructions and take appropriate action if necessary.

6. Applicability

These instructions apply to:

1-6 All banking institutions.

2-6 All branches of banking institutions.

3-6 All subsidiaries (if applicable).

7. Implementation

Banks must implement these instructions within six months from the date of issuance.

8. Amendments

These instructions may be amended by the Central Bank of Egypt.

It is also emphasized that the need to review the fee structure for dormant accounts is essential to ensure that fees are reasonable and do not discourage customers from reactivating their accounts. This is particularly important for accounts with low balances or those managed under simplified customer due diligence procedures. Banks must ensure that their fee structures for dormant accounts are aligned with these instructions.