Circular dated August 4, 2021 regarding regulatory instructions regulating dormant accounts

Dear Sir / Chairman of the Board of Directors

Greetings,

In light of the current trend towards enhancing financial inclusion and incorporating all segments of society into the formal financial system, and given the importance of accurately measuring financial inclusion levels to assess the availability of financial services to citizens and their usage thereof, the Central Bank has deemed it necessary to issue a unified definition for active and dormant accounts at the banking sector level, as the number of active accounts is one of the most important indicators for measuring financial inclusion, reflecting the actual use of bank accounts.

Based on the above, and in order to harmonize the practices followed by banks regarding dormant accounts, the Board of Directors of the Central Bank, in its session held on July 27, 2021, has decided the following:

1. All banks must adhere to the following definitions:

1-1 Dormant Account: An account on which none of the following transactions have been performed: withdrawal, deposit, transfer, or electronic or authenticated balance inquiry, for a period of one year for current accounts and mobile phone accounts, and two years for savings accounts. Transactions performed by the bank on customer accounts, such as deducting fees or adding returns, are not considered transactions that activate the account.

2-1 Customers with Dormant Accounts: Customers whose all accounts are dormant at the bank.

3-1 Active Account: An account on which at least one transaction (withdrawal, deposit, transfer, or electronic or authenticated balance inquiry) has been performed within one year for current accounts and mobile phone accounts, and two years for savings accounts, through bank branches or any available communication means or electronic channels, as well as through payment service providers for mobile phone accounts.

4-1 Activated Mobile Phone Account: An account on which the customer has performed at least one financial transaction (withdrawal, deposit, or including other debit operations from the account according to the instructions for mobile payment services, excluding balance inquiry or PIN change operations) within 90 days, through bank branches, their affiliated service providers, or available electronic channels and communication channels.

2. Reactivation of Dormant Accounts:

1-2 In the case of other active accounts for the customer at the same bank, the customer is allowed to reactivate their dormant accounts using any of the bank's communication means (for example, but not limited to: through branches, call centers, internet banking, ATMs, or other electronic communication channels), after verifying the customer's identity according to what is practiced in this regard.

2-2 For mobile phone accounts, the customer is allowed to reactivate their account through bank branches, payment service providers, internet banking, electronic channels, and other communication channels.

3-2 In the case of considering the customer dormant according to the definition in item (2-1), the customer must do the following at a minimum to reactivate their accounts through any of the bank's communication means according to each bank's policy: 1-2-2 Authenticate the account balances. 2-2-2 Submit a written request to reactivate the accounts. 4-2 Banks must respond to customers' requests to reactivate their accounts, without imposing any fees for reactivating or closing the accounts. 5-2 Closing the account is allowed if one year has passed since its balance decreased to zero, and the customer has not reactivated it.

3. Notifying the Customer:

1-3 The customer must be notified through any available communication channels monthly for 3 months before their accounts are considered dormant.

2-3 Banks must make the necessary effort to reduce the number of dormant accounts by contacting customers periodically (at least quarterly).

3-3 It is necessary to notify the customer (before and after including their accounts in dormant accounts) through any available communication channels about the expenses resulting from that, as well as the reactivation procedures.

4. Protecting Customer Rights:

1-4 Banks continue to pay any drawn checks and execute any standing instructions on dormant accounts, and this is not considered reactivation of the accounts, with the necessity of exercising due care to verify the validity of checks before payment, as well as notifying the customer after payment through any available communication means.

2-4 No fees or charges shall be deducted from dormant accounts when the account balance decreases to zero, with consideration not to disclose the account with any expenses or currencies. For dormant mobile phone accounts, fees or charges are allowed to be deducted at a maximum of sixty Egyptian pounds annually, provided there is a balance for the type of account and the periodicity of the return account. 3-4 For accounts that generate returns, the calculation of returns due to the customer continues, and they are added according to the periodicity of the return account. 4-4 The terms and conditions referred to in these instructions, as well as any other terms related to dormant accounts, must be included in all documents for opening accounts and the bank's website, with the relevant employee explaining these terms to the customer and informing them during the account opening procedures. 5-4 Allowing home visits for persons with disabilities and the elderly (over 65 years) by bank employees to reactivate dormant accounts and collect data and sign required documents upon the customer's request, with the necessity of putting controls and procedures for these visits in place.

5. Supervision of Dormant Accounts:

1-5 Tightening supervision of dormant accounts by automatically freezing them and conducting periodic reviews through double supervision, to be stipulated in the bank's internal work procedures, as well as preparing quarterly reports to be reviewed by the bank's compliance department. 2-5 Including dormant accounts and the review procedures for them within the scope of the bank's internal and external audit.

6. These instructions do not apply to any of the following:

1-6 Credit facilities of all kinds, including credit cards. 2-6 Prepaid cards. 3-6 Savings vehicles (deposits and certificates).

7. Banks shall declare monthly to the Central Bank's financial inclusion database all dormant accounts as well as dormant customers.

8. Banks are granted a period of 6 months from the date of issuance of the instructions to regularize their status.

I would also like to emphasize the necessity of reconsidering the reduction of fees and charges on dormant accounts to the lowest possible level, especially for accounts with low balances as well as accounts opened using simplified customer identification rules, in addition to purging dormant accounts at the bank to comply with all items of the instructions.

Please be kind enough to direct compliance with the mentioned decision.

Accept our highest regards,

Tarek Amer