BY: CONSTANT MUNDA
FINANCIAL services and utility companies still holding onto unclaimed assets face penalties, the Unclaimed Financial Assets Authority warned yesterday. Banks, insurers, brokerage firms, pension funds and utilities including mobile money service providers are under Unclaimed Financial Assets Act 2011 required to surrender such dormant assets by November every year.
Penalties amounting to 25 per cent of the value of unclaimed assets not surrendered will now be imposed, chief executive Kellen Kariuki said. She said the authority, fully constituted only in January, has hired “enough auditors for the work which may begin almost immediately”.
“We shall not be taking anybody to court because the law allows us to impose the penalties,” she said. “We are however working with regulators and member associations to increase compliance.”
Kariuki spoke during the launch of a month-long public awareness campaign in partnership with Kenya Bankers Association. She added the UFAA regulations will be gazetted any time.
KBA chief executive Habil Olaka said that lack of regulations should not be a reason for not complying.
“This shouldn’t deter reporting and remitting unclaimed funds, particularly now that the authority is operational,” Olaka said. Banks account for 62 per cent of the Sh3.4 billion that UFAA so far has in the Unclaimed Assets Trust Fund account at the Central Bank. Cash surrendered in form of insurance policies and shares constitute about 20 per cent and 17 per cent, respectively, Kariuki said.
UFAA has so far received claims amounting to Sh32 million, with only Sh2 million verified and ready to be paid to the owners, manager for unclaimed financial assets John Mwangi said.
Unclaimed assets include cheques and money orders not cashed for more than two years, and cash deposits, savings and securities in banks and other financial institutions that have remained idle for five years.
Others are insurance policies and annuity contracts that mature or are terminated but remain unclaimed for two years.
They also include gift vouchers, credit memos, wages, dividends and utility deposits such as for water and electricity.