Showing higher profit in tight market
Abu Sazzad: The deposits of dormant and freeze accounts are turning as the operating profit of the banks due to poor business, earned from the core banking in the recent years. As a result, the untouchable money is grabbing by the bank directors and shareholders, ignoring all ethics and rules of banking.
A good number of private commercial banks are calculating their dormant and freeze accounts deposit as the operating profit because of getting appreciation from the owners. Higher officials including the managing director, deputy managing director and Head of accounts are involved to conduct such kind of illegal financial transactions, said banking sources.
The banking business was poor in the last year which severely affected on the profit; they said adding the higher officials deliberately transferred such money as income to expose their efficiency to the bank owners.
Experts said banks never can transfer the deposit of dormant and freeze accounts to their income which is completely unethical and an act of violating the existing banking rules of the country. If any bank transferred such money to income, the related officials should bring under justice.
According to bankers, an account freeze is an action taken by a bank or brokerage that prevents any transactions from occurring in the account. Typically, any open transactions will be canceled, and checks presented on a frozen account will not be honored. On the other hand, dormant account is the bank account which becomes inoperative account due to nil customer initiated transaction for a given period of time.
The deposits of such accounts could be utilized after the decree of court.
A senior bank official shared an example on the condition of anonymity that Abbas Uddin Ahmed, former Managing Director of IFIC, Karachi Branch withdrew dormant account money worth Rupee 4.50 crore about 30 years back. He was able to leave from Pakistan through forging the money but his case is still pending in Karachi High Court. Deposit of dormant and freeze account is generally recognised as ‘drug money’, so, banks can never conduct such illegal activities.
Talking to Daily Industry, Sirajul Islam, Executive Director and Bangladesh Bank Spokesman told that the banks can create a freeze under the direction of the central bank and any kind of transaction is strictly prohibited until providing further instruction.
Explaining the dormant account, Islam said, if any account holder does not make any transaction for the last ten year, his account will be dormant.
Banks are not permitted to transfer the deposit of dormant and freeze accounts as per banking regulation. If bank do not found the account holder or successor, the respective bank will have to deposit the money of the dormant account to central bank. After completing all procedures, the central bank will deposit the money of the dormant account to the government account.
The unclaimed bank deposits would be transferred to the government account if no demand is received for refund of the inoperative deposit for 12 years, he added.
Deposits and assets at banks not claimed by anyone for 10 years are considered unclaimed, according to Bangladesh Bank guideline. Banks will have to submit the unclaimed fund and asset to the central bank first and two years later the BB will transfer those to the government account.
Before submitting the fund and assets to the BB, commercial banks will have to send a registered letter through the post office to the client’s address mentioned in their accounts. Clients will have to be given three months to reply to the letter.
If clients do not give any feedback, banks will have to submit such funds and assets to the central bank in April of every calendar year. After transferring the funds and assets to the BB, banks will have to publish advertisements in at least two newspapers once every three months for a year. If anyone comes up with a claim after the transfer to the central bank, the banks will have to submit the clients’ applications along with required documents. No claim would be accepted after 12 years, according to BB guideline.
Experts have underscored the need for strengthening monitoring of the central bank to tackle such illegal and unethical banking transactions. If central bank finds any prove, the related bank officials will be punished for violating banking rules and regulations.