Dar es Salaam. The government’s decision to formulate a bill that seeks to guide the management of unclaimed assets is a move in the right direction, analysts told The Citizen yesterday.
The Minister of Finance and Planning, Dr Mwigulu Nchemba, said in Parliament on Monday that the government would finalise preparations for the tabling of the Unclaimed Assets Bill during the 2022/23 financial year.
The Capital Markets and Securities Authority (CMSA) principal public relations manager, Mr Charles Shirima, said the Bill would come at the right time when the country was largely relying on inheritance laws to decide on the fate of assets left behind by deceased persons.
“When we say unclaimed assets, we mean that even after identifying heirs in line with the inheritance law, we still have entitlements that have not been identified yet. A law that provides guidance on what needs to be done to ensure that such assets are passed on to the right people makes a lot of sense,” he said.
Zan Securities Limited chief executive Raphael Masumbuko said stock market brokers were receiving queries from people come to them with share and/or dividend documents of their deceased parents.
“In some cases, it happens that a person buys shares, but doesn’t tell the family about the investment. When such a person dies, family members only come to know of any investment after the relevant documents are deposited in the deceased’s post office box, or when family members come across the documents,” he said.
Having seen the documents, they tend to ask themselves what they are all about.
“They are ultimately advised to seek help from stock market experts, and we have been helping a lot of such people on how to claim assets that are in the form of shares or dividends,” Mr Masumbuko added.
Not all entities that hold unclaimed assets reveal them.
However, CRDB Bank Plc said during its Annual General Meeting about five years ago that it was holding about Sh7 billion in unclaimed dividends which had accumulated over the years.
The sum has since risen to about Sh9.2 billion, according to the lender’s 2021 annual report.
A financial analyst who asked not to be identified commended CRDB Bank for being open on the matter.
“Some people die without informing their relatives about the money they had in their bank accounts, and that is why questions arise as to what happens to the money held in idle bank accounts,” he said.
He added that the situation was the same with banks that manage proceeds of initial share sales (IPOs), especially with regard to refunds following oversubscriptions when not everyone bothers to ensure that they get their money back.
“We are talking about those who buy such assets on a pro-rata basis. Not everyone will claim a refund, and that means that their money will remain in idle accounts,” he said.
Last year, the Controller and Auditor General (CAG) outlined challenges around the management of unclaimed money held by banks and mobile phone operators, saying there was a potential risk for losses.
Under the laws governing the Bank of Tanzania (BoT), money in a bank account which remains dormant for 15 years and that in mobile money wallets which has not been transacted for five consecutive years is considered to be unclaimed financial assets, or abandoned property.
Commercial banks and telecommunication companies are thus required to regularly remit such money to BoT.
Sh49 billion “lying unclaimed”
However, the CAG’s 2019/20 audit report on the management of unclaimed assets at the Ministry of Finance and BoT indicated that not all banks remitted abandoned money.
The report said BoT records showed that the central bank held Sh12.5 billion in unclaimed financial assets last year, and the CAG’s office estimated that about Sh49 billion which could be invested was lying idle in banks and other financial institutions.
“This discrepancy indicates weaknesses in the overall management of unclaimed financial assets in the entire cycle from identification to disposition,” the report stated.
It further said that out of 26 commercial banks which had been operating for more than 15 years by June, 2020, hence qualifying to remit the unclaimed money, only three transferred unclaimed money to the central bank.
The three banks transferred a total of Sh2.5 billion, while four mobile money operators had remitted about Sh10 billion by June 2021.