House of Representatives

Second Reading Speech

Schedule 1 of the Bill amends the Banking Act 1959 to exclude 'reactivated accounts' (accounts that have been assessed unclaimed but are transacted prior to be transferred to the Commonwealth) from being transferred to the Commonwealth and to allow the Commonwealth to return moneys collected unnecessarily to authorised deposit-taking institutions (ADIs).

The Government provided a transitional arrangement to ADIs assisting them to implement the legislative changes made late last year, which allow them to choose an assessment date between 31 December 2012 and 30 May 2013 for unclaimed bank accounts.

I am advised that some ADIs have implemented the changes on the basis of an assessment date that has already passed but have subsequently allowed transactions on accounts were unclaimed as at the assessment date. The holders of these accounts may think that they have reactivated their accounts and consequently they would not be transferred to the Commonwealth. However, under the current legislation, ADIs are required to report and transfer unclaimed moneys, including reactivated accounts, to the Commonwealth as at the reporting date.

The legislation amendments will allow ADIs to exclude reactivated accounts from their reports and transfers of unclaimed moneys to the Government. This will ensure reactivated accounts are not transferred to the Government unnecessarily.

The amendments will also allow the Government to provide refunds directly to ADIs for moneys collected unnecessarily. Full details of the amendments in this Bill are contained in the Explanatory Memorandum.