Gov’t to take unclaimed cash on Dormant Mobile Money accounts -New law says

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Law to manage Dormant Mobile Money accounts passed: Mobile Money booths; Courtesy Photo

The Ugandan Parliament has passed the National Payment Systems Bill, 2019 giving government powers to take over all the cash found on dormant mobile money accounts.

The National Payment Systems Bill was passed during a Thursday plenary session chaired by Rt. Hon. Rebecca Kadaga.
Section 57 of the bill describes a dormant account as an electronic money account that does not have a registered transaction for nine consecutive months shall be considered dormant.

The bill requires a mobile money service provider also known as an electronic money issuer, to give notice to the customer of at least one month before the 9 months period of dormancy elapse, informing him or her that the mobile/ electronic money account shall be suspended unless there is a transaction on the account.

At the expiry of the notice, the electronic money issuer shall block the electronic money account and shall not permit further transactions until the account is reactivated by the customer.

It also states that the electronic money issuer shall within five working days after blocking of the electronic money account, notify the customer that the electronic money account is blocked and provide instructions on the process of reactivation of the account.

The new law now awaiting the president’s assent, states that if the account is not reactivated within six months after it has been blocked, the electronic money issuer shall close the electronic money account.

It also indicates that upon closure of the electronic money account, the Telecom Company or any other electronic financial service entity, shall transfer the balance of an electronic money account and identifying information to the Central Bank.

According to the new law, the Central Bank is obligated to refund any unclaimed balances to the account holder of an electronic money account or, if the account holder is dead, his or her legal representative, upon a request made within seven years after the dormant account is transferred to the central bank.

It further states that the Central Bank shall after the expiration of the period of 7 years, transfer the unclaimed balances to the Consolidated Fund.

Reports from demographic surveys show that mobile money is currently predominantly used in Uganda in transfer of money between users owing to its flexibility through facilitating financial transactions without necessarily accompanying exchange of goods or services.

Ever since the service was introduced in the country, there has not been a a substantive law to manage mobile money transactions with no properly designed procedure on how cash on dormant accounts is disposed.

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