Swiss banks reveal new guidelines for dormant accounts

The Swiss Bankers Association has revealed details about its new guidelines for dormant accounts. Banks drew up the new rules, following a barrage of international criticism over the handling of accounts dating back to the Nazi era.

This content was published on February 3, 2000 - 08:07

The Swiss Bankers Association has revealed details about its new guidelines for dormant accounts. Banks drew up the new rules, following a barrage of international criticism over the handling of accounts dating back to the Nazi era.

Historically, Swiss banks have classified accounts as "dormant", if there has been no activity in the account, or if the account-holder has not contacted the bank, for at least 10 years.

The new guidelines re-define "dormancy" as something that must be determined by circumstances.

This puts the onus on the bank to try to locate the customer, in cases where an account has been left untouched for too long.

"As soon as a bank notices that contact with a customer has become lost, it should instigate a search to re-establish contact," said Victor Füglister, the Association's deputy chief executive officer.

"If this search is not successful, then the assets in question are classified as being dormant," he added.

The Bankers Association says a search system is currently being developed, and a pilot project involving three of the larger banks is due to start shortly. Ultimately, it is expected that a type of administrative and investigative bureau will be set up to conduct searches on behalf of banks.

Füglister points out that any search measure will comply with Swiss bank confidentiality laws.

In cases where "missing" customers cannot be located, the data about that customer will be stored in a special secure database, to which only the Swiss banking ombudsman will have access. Only the customer or his or her heirs will be able to activate the account.

In cases of dormancy, the rights of the customer remain intact and the banks waive the right to terminate the contractual relationship. The guidelines contain detailed provisions as to how a dormant account must be administered in the interests of the customer.

The guidelines also state that the costs banks incur in connection with the handling of dormant assets must be kept in proportion to the value of the assets in question.

The new guidelines will come into effect at the end of June and replace the current rules dating from 1995.

The Swiss federal banking commission, which will monitor compliance with the new guidelines, has welcomed the steps taken by the Swiss banks in their efforts to solve the problem of dormant accounts once and for all.

From staff and wire reports

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