Introduction to Account Dormancy

An account is categorised as a dormant account when the customer hasn't initiated a transaction for a continuous period of 15 years.

After becoming dormant, on 30th September, the holder of a dormant account is notified that the account should be brought back to active status on or before the 31st of March. Failing to do so, the account will be closed by transferring the account balance to the government agency designated for this purpose on the 1st of April.

With the introduction of the account dormancy functionality, Temenos Transact becomes capable of handling and tracking the dormant accounts from the date of transferring the funds to a government agency Temenos Transact, till its claim with the government agency, settlement and closure.

So, a dormant account with a balance of 100 euro and above is picked up on the 30th of September and a notification is sent to its customer. If the customer does not turn up till the 31st of March of the subsequent financial year (within six months), then the funds in that dormant account are transferred to the government agency, a government agency designated for this purpose.

On a later date, if the customer of the dormant account approaches the bank, a claim for the amount transferred to the government agency is prepared along with eligible interest, tax etc. and is sent to the government agency. Upon receiving the settlement amount from the government agency, the amount is paid to the customer either through a cheque or through a transfer to another of the customer's accounts. The dormant accounts are then closed upon settlement.

Click here to understand the terms and abbreviations used in this module.

Dormancy and Abandoned Property

According to regulatory guidelines, all banks that issued financial instruments like pay orders, demand drafts, etc. are required to classify these instruments as abandoned property if they remain unpaid for a specific period from the expiry date.

The current scope of this functionality is for the classification of bank-issued instruments like pay orders, etc. as abandoned property if an instrument remains unrealised for a specific period of time after its expiry date. For example, it can be 10 years as per regulation.

The ACCDOM.DORMANCY.PARAM application is used to parameterise instruments as abandoned property.

When an instrument is classified as Abandoned Property, the corresponding funds will be transferred to an internal account.

During the COB process, a version of the PAYMENT.ORDER application will be triggered to transfer the funds to an internal suspense account as parameterised in the ACCDOM.DORMANT.PARAM application.

The new functionality describes the classifications of bank-issued instruments as Abandoned property. It is considered as abandoned property any sum payable on cheques or on written instruments, on which the bank is directly liable (pay order issued).

This functionality provides evidence of all the instruments being abandoned.