What Happens to Unclaimed Money on Deceased Individuals’ Mobile Money Accounts?

by Christopher Kiiza
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When a mobile money account remains dormant for 15 months, the telecommunications company initiates a process to transfer the money on that account to Bank of Uganda. This action is effected when the account holder is no longer actively using their mobile money account due to reasons such as death or relocation to another country.

As a result, Bank of Uganda is now stuck with 69 billion shillings that has been collected from telecom companies on dormant mobile money accounts.

There has been criticism from the public and lawmakers that the Bank of Uganda has not undertaken adequate measures to educate Ugandans on the proper procedures for retrieving funds that remain dormant within mobile money accounts belonging to deceased individuals.

On July 29, 2020 Parliament enacted the National Payment Systems Act (NPSA) which provides for the regulation of payment systems in Uganda.

The NPSA aims to; provide for the safety and efficiency of payment systems; prescribe the framework to govern the oversight and protection of payment systems; provide for financial collateral arrangements; regulate operators of payment systems; regulate payment service providers; regulate the issuance of electronic money; and provide for the oversight of payment instruments.

The National Payment Systems Act, 2020 defines a dormant mobile money account as any account that does not carry on any transaction in nine consecutive months. If a mobile money account is dormant for nine consecutive months, the electronic money issuer (EMI) is required to notify the account holder in writing.

When a mobile money account remains dormant for 15 months, the telecommunications company transfers the money on that account to Bank of Uganda.

The EMI is also required to give the account holder one month to reactivate the account. If the account is not reactivated within one month, the EMI is required to block the account.

If the account remains blocked for six months, the EMI is required to close the account. The balance of the closed account and the identifying information of the account holder must be transferred to the Bank of Uganda.

The Bank of Uganda then holds the unclaimed balance for seven years. If the account holder does not claim the balance within seven years, the balance will be transferred to the Consolidated Fund, which is a government account.

Recently, the Parliamentary Committee of ICT launched an investigation in response to a petition presented to Parliament by Sheema South MP, Prof Elijah Mushemeza seeking reforms aimed at simplifying the procedures which hinder claimants from accessing the money left on mobile money accounts, particularly in cases involving the account holder’s demise.

The Committee, on Thursday, interfaced with officials from Bank of Uganda on the matter.

The Executive Director, Finance in the Bank of Uganda, Richard Byarugaba said that before the enactment of the National Payment Systems Act 2020, the funds on dormant mobile money accounts were being kept with Telecom operators which also processed the claims.

“It is impossible for Bank of Uganda to say that this amount is for the dead when the record of the dead has not been reported,” he said.

However, in two years of implementing the National Payment Scheme Act, Byarugaba said over 300 million shillngs has been paid out to claimants, out of the 69 billion shillings that has been collected from telecom companies on dormant mobile money accounts.

“We have up to sh69 billion. Out of that, we have paid out about sh300 million. So, we still have 68.7 [billion shillings]. We shall start in 2027 sending money to the Consolidated Fund. We track the money which we have had for seven years, then we take a portion. We don’t take everything. Only that which has been with us for 7 years,” he said.

Section 57 of the National Payment Systems Act sets a timeline of 7 years within which any claimant can claim the funds from Bank of Uganda before it is transferred to the Consolidated Fund.

After this period, any claim to the funds can be made through the Ministry of Finance.

“If it is not claimed that the government may use it to build a school or a hospital; something of a public nature that the public will use,” said Byarugaba.

Byarugaba provided an explanation regarding the procedure for accessing funds remaining in mobile money accounts owned by deceased individuals.

“You go to the nearest service center and report that claim that the person died [and] this was their number, and possibly you have their ID. They then give you a form to fill. If the money is still with them, they will pay.”

At least 11.3 million mobile money accounts remained inactive in the three months between January and March 2023.


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