Kathmandu: The government has announced plans to bring funds from bank accounts that have remained inactive for more than a decade into the state treasury, as part of its broader revenue reform strategy under the 100-point governance agenda. The decision, approved during the first Cabinet meeting of the new government led by Balen Shah last Friday, aims to utilize idle financial resources for development projects.
According to existing regulations of Nepal Rastra Bank, a bank account is classified as dormant if no transactions—deposits or withdrawals—occur for three consecutive years. Currently, dormant accounts across the banking system hold around Rs 1.88 trillion. However, this figure includes all inactive accounts, not just those dormant for over 10 years. The central bank is still compiling data to determine how much of this total falls into the 10-year category.
The government plans to collect details of such long-inactive accounts and, after completing legal procedures, transfer unclaimed funds into the state treasury. The initiative is intended to ensure more effective use of idle national resources. The reform agenda also sets a 90-day deadline to identify and manage similar underutilized assets.
Under the existing legal framework, particularly the Bank and Financial Institutions Act, dormant funds are managed through the central bank. Banks are required to report accounts that have remained inactive for 10 years and publish public notices every five years to allow account holders to claim their funds. If no claim is made even after 20 years, the money is transferred to the Banking Development Fund managed by Nepal Rastra Bank, where it is used for the development of the financial sector.
The new policy, however, seeks to redirect such funds to the government treasury after 10 years of inactivity, marking a shift from the current practice. This would likely require amendments to existing laws, as the current provisions mandate that such funds remain within the central bank’s designated fund.
Officials note that over Rs 1.67 billion has already been deposited in the Banking Development Fund from accounts that remained unclaimed for more than 20 years. However, the exact amount from accounts inactive for 10 years or more is yet to be determined.
Reactivating a dormant account is relatively straightforward. Account holders can visit their bank and submit a written request to restore the account. If their Know Your Customer (KYC) details are already updated, no additional documentation is required. Banks may also allow reactivation through online or electronic means.
If an account has had no transactions for 10 years and holds a zero balance, banks are authorized to permanently close it after issuing a public notice. Meanwhile, in cases where the account holder has died, the funds are disbursed to nominated individuals or legal heirs in accordance with prevailing laws. If no claimant is found, the funds are eventually transferred to the central bank’s Banking Development Fund.
Despite the Cabinet’s decision, legal experts point out that transferring such funds directly into the state treasury cannot happen immediately under current laws. Amendments to the Bank and Financial Institutions Act would be necessary to implement the new policy.
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