KARACHI, July 21: The State Bank on Friday asked all banks and development finance institutions (DFIs) to surrender all those deposits which had not been operated during the last 10 years period.

The SBP issued a circular explaining the procedure to surrender the deposits but mentioned that except deposits in the name of a minor or a government or a court of law would not be surrendered.

To facilitate banks and DFIs, the SBP explained the unclaimed deposits lying inoperative for the last 10 years.

According to the SBP definition, a debt payable either in Pakistani currency or any other (foreign) currency is owing by a banking company by reason of a deposit or a financial instrument not being recorded in the name of a minor or a government or a court of law, in respect of which no transaction has taken place and no statement of account has been requested or acknowledged by the creditor during a period of 10 years.

All banks and DFIs will submit branch-wise list of unclaimed deposits and instruments separately for Pakistani rupee and in foreign currency (FCY) within 30 days after the close of each calendar year.

The amount of unclaimed rupee and FCY deposits and instruments will be surrendered during the first week of April of each calendar year, along with a list of unclaimed deposits or instruments which have been refunded by banks and DFIs during the period.

The banks and DFIs will surrender the outstanding amount of the unclaimed FCY deposits and instruments through SBP Nostro accounts maintained in any one of the six currencies -- US dollar, yen, euro, British pound, Swiss franc and UAE dirham.

The unclaimed FCY deposit or instrument maintained in other than the six currencies will be surrendered by converting the same into the US dollar. In case of frozen FCY deposits and instruments of 1998, as and when become unclaimed, the banks and DFIs will surrender the equivalent Pakistani rupee to the SBP.

All banks and DFIs upon completion of a 10-year time period will serve a three-month notice in writing by registered post acknowledgement to the creditor or the beneficiary of the deposit and instrument on his or her address last made known to the banking company.

The banks and DFIs will insert a clause in “bold words” in their respective account opening form (AOF) indicating that a deposit or instrument, which remains inoperative for a period of 10 years, will become unclaimed and will be surrendered to the SBP.

The existing account-holders should also be informed about the same through a letter to be sent with the bi-annual statement of account or any other methods as deem feasible by the bank or DFI.