MTN transfers Shs42.7b in dormant mobilemoney accounts to Bank of Uganda
MTN has declared mobile money accounts as dormant if they remain inactive for 450 days or 15 months. The dormant accounts have accumulated a total of Shs42.7 billion (Ugandan Shillings) between 2009 and 2022, with Shs35 billion held in 7.51 million accounts accumulated between 2009 and 2021.
The declaration of mobile money accounts as dormant after a certain period of inactivity is a common practice in the financial industry to ensure proper management of customer accounts and compliance with regulations. This means that if a mobile money account remains inactive for 450 days or 15 months, it will be considered dormant, and the funds held in the account may be subject to certain rules and regulations, such as being transferred to a separate account or escheated to the relevant government authority.
It is important for mobile money users to be aware of the account dormancy policy of their service provider and to keep their accounts active by regularly transacting or accessing their accounts to avoid any potential issues with dormant accounts. Users should also be familiar with the terms and conditions of their mobile money service provider regarding account dormancy and the handling of funds in dormant accounts.
Based on the details provided, it appears that MTN has reported a significant amount of money held in dormant mobile money accounts, with at least Shs35 billion accumulated between 2009 and 2021. MTN's policy considers an account dormant after 450 days or 15 months of inactivity, and the law now requires telecoms to transfer funds held in dormant accounts to the Bank of Uganda.
During 2022, MTN reported 1.83 million dormant mobile money accounts, which held at least Shs7.68 billion. The money in these dormant accounts can only be redeemed by a third party if the owner of the account has been declared deceased. However, the National Payment Systems Act requires the third party claimant to obtain legal representation.
There have been reported instances of telecoms preventing third parties without legal representation from claiming money in accounts of deceased individuals. However, the National Payment Systems Act provides a procedure through which such money can be redeemed and also guides on how a telecom can declare a mobile money or electronic money account as dormant. According to the Act, telecoms are required to notify a subscriber whose account has been inactive for nine months of a pending suspension, unless there is a transaction on the account. Afterward, the account is blocked and suspended. If the account is not reactivated within six months, it is closed and any money in it is transferred to the Bank of Uganda, where it is held before being transferred to the Consolidated Fund if not claimed by the owner or a legal representative.
Further details indicate that MTN recorded an average of Shs640 million in dormant accounts per month in 2022, and between January and March, an average of 100,000 dormant accounts worth Shs350 million were recorded. This highlights the importance for mobile money users to be aware of their account activity and keep their accounts active to avoid potential issues with account dormancy and transfer of funds to the Bank of Uganda or other authorities, as per the policies and regulations in place.
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