How to Claim a Dormant Bank Account in the Philippines

How to Claim a Dormant Bank Account in the Philippines

Introduction

In the Philippines, a bank account is considered dormant when there has been no deposit, withdrawal, or other transaction initiated by the account holder for a specified period. This status is governed by banking regulations to protect depositors' funds while ensuring financial institutions manage inactive accounts efficiently. Dormancy can lead to service charges, reduced interest earnings, and, if prolonged, the escheatment of funds to the government. Claiming a dormant account involves reactivating it through the bank or, in advanced cases, pursuing recovery from state authorities.

This article provides a comprehensive overview of dormant bank accounts in the Philippine legal context, including definitions, governing laws, procedures for claiming, required documents, potential challenges, and preventive measures. It draws from key statutes such as Republic Act No. 3936 (the Unclaimed Balances Act), as amended, and regulations from the Bangko Sentral ng Pilipinas (BSP). Note that while this information is based on established legal frameworks, individual cases may vary, and consulting a lawyer or the relevant bank is advisable for personalized guidance.

Legal Definition of a Dormant Bank Account

Under the BSP's Manual of Regulations for Banks (MORB), a bank account becomes dormant based on the following timelines:

• Savings Accounts: Dormant after two (2) years of inactivity.
• Demand/Current/Checking Accounts: Dormant after one (1) year of inactivity.
• Time Deposits: These do not typically become dormant but may mature and remain unclaimed, leading to similar treatment.

Inactivity means no transactions such as deposits, withdrawals, transfers, or interest crediting initiated by the account holder (automatic interest postings by the bank do not count as activity). Once dormant, banks may impose monthly service charges, which can erode the balance over time. If the balance falls below the minimum required, additional fees may apply.

Importantly, dormancy is distinct from escheatment. Escheatment occurs under Republic Act No. 3936 when an account remains unclaimed for ten (10) years from the last transaction or notice. At that point, the funds are considered "unclaimed balances" and are transferred to the National Treasury.

Governing Laws and Regulations

Several laws and regulations frame the handling of dormant accounts:

1. Republic Act No. 3936 (Unclaimed Balances Act of 1963), as amended by Presidential Decree No. 679: This mandates banks to report dormant accounts with balances of at least PHP 500 that have been inactive for 10 years. Banks must notify account holders via registered mail or publication before escheatment. Funds are then deposited with the Bureau of the Treasury (BTr), where they can be claimed indefinitely, subject to proof of ownership.

2. BSP Circular No. 928 (2016) and related issuances: These outline dormancy rules, service charges, and reactivation procedures. Banks must notify depositors before classifying an account as dormant and cannot charge fees that would reduce the balance below PHP 0 without prior notice.

3. Anti-Money Laundering Act (Republic Act No. 9160, as amended): Claims may trigger due diligence checks to prevent fraud.

4. Civil Code of the Philippines (Republic Act No. 386): Governs ownership rights, succession for deceased account holders, and prescription periods (generally 10 years for money claims, but unclaimed balances do not prescribe under RA 3936).

5. Data Privacy Act (Republic Act No. 10173): Banks must protect personal information during the claiming process.

Banks are required to maintain records of dormant accounts for at least 10 years, facilitating claims.

Procedures for Claiming a Dormant Bank Account

The claiming process depends on whether the account is merely dormant or has been escheated. Below are step-by-step guides.

1. Claiming a Dormant Account Before Escheatment (Within 10 Years of Inactivity)

Most claims fall into this category and are handled directly with the bank.

• Step 1: Verify Account Status
  Contact the bank branch where the account was opened. Provide account details (e.g., account number, name). Banks may confirm dormancy over the phone but require in-person verification for security.

• Step 2: Prepare Required Documents

  • Valid government-issued IDs (e.g., passport, driver's license, SSS ID, UMID, or PhilID) – at least two, one with photo.
  • Proof of account ownership (e.g., passbook, ATM card, or account statement if available).
  • If claiming for someone else: Special Power of Attorney (SPA) notarized, or court-appointed guardianship documents.
  • For joint accounts: Consent from all co-owners.
  • For deceased account holders: Death certificate, proof of heirship (e.g., extrajudicial settlement of estate, will, or court order), and BIR clearance for estate taxes if applicable.

• Step 3: Visit the Bank
  Go to the original branch or a designated one. Fill out a reactivation form. The bank may require a small deposit (e.g., PHP 100–500) or withdrawal to reactivate the account.

• Step 4: Undergo Verification
  The bank will verify identity and may conduct know-your-customer (KYC) checks. This could include answering security questions or providing additional proofs.

• Step 5: Reactivate and Access Funds
  Once approved, the account is reactivated. Any accrued service charges may be deducted, but balances cannot be negative. Funds are immediately accessible.

• Timeline: Typically 1–3 business days, but complex cases (e.g., involving heirs) may take weeks.

• Costs: Minimal; possible reactivation fee (capped by BSP at PHP 30–50/month for dormancy charges, but waived in some banks).

2. Claiming an Escheated Account (After 10 Years of Inactivity)

If the account has been escheated, funds are with the Bureau of the Treasury.

• Step 1: Confirm Escheatment
  Check with the original bank for escheatment records. Alternatively, visit the BTr website or office to search the unclaimed balances database.

• Step 2: Gather Documents

  • All documents from the pre-escheatment process, plus:
  • Affidavit of claim (notarized, stating ownership and reasons for delay).
  • Bank certification of escheatment.
  • Proof of no prior claim.
  • For heirs: Additional succession documents, including BIR estate tax clearance.

• Step 3: File a Claim with the Bureau of the Treasury
  Submit documents to the BTr's Cash Department in Manila or regional offices. Claims can be filed in person or via mail.

• Step 4: Verification and Approval
  The BTr reviews documents, which may involve coordination with the bank. Approval is granted if ownership is established.

• Step 5: Receive Funds
  Funds are released via check or bank transfer, minus any administrative fees (minimal, as per RA 3936).

• Timeline: 1–6 months, depending on complexity.

• Costs: Notarial fees for affidavits (PHP 100–500), possible travel expenses.

Special Cases

• Deceased Account Holder: Heirs must settle the estate first under the Family Code and Tax Code. If the balance is below PHP 200,000, a simple affidavit of self-adjudication may suffice; otherwise, judicial settlement is needed.

• Lost Passbook or Documents: Banks may require an affidavit of loss and indemnity bond.

• Overseas Filipinos: Claims can be done via authorized representatives with a consularized SPA. Some banks offer online reactivation for dormant accounts, but escheated ones require physical submission.

• Corporate or Trust Accounts: Require board resolutions or trust documents.

• Minors' Accounts: Guardian must claim until the minor reaches 18.

Potential Challenges and Remedies

• Forgotten Details: If account number is unknown, provide personal info to the bank for a search (subject to data privacy consent).

• Fraud Risks: Banks may flag suspicious claims; always use official channels.

• Service Charges Erosion: If balance is zero due to fees, the account may be closed, but records persist for claims.

• Prescription: Under RA 3936, escheated funds do not prescribe, meaning claims can be made anytime.

• Disputes: If denied, appeal to BSP's Consumer Assistance Mechanism or file a civil case in court.

Preventive Measures

To avoid dormancy:

• Maintain regular transactions (e.g., small deposits annually).
• Update contact details with the bank for notifications.
• Nominate beneficiaries for easier succession.
• Monitor accounts via online banking.

Conclusion

Claiming a dormant bank account in the Philippines is straightforward if addressed early but becomes more bureaucratic post-escheatment. The process upholds property rights while safeguarding against abandonment. Account holders should act promptly upon noticing inactivity to minimize fees and complications. For the latest updates, refer to BSP circulars or consult legal professionals, as regulations may evolve. This ensures compliance with Philippine laws and maximizes recovery of rightful funds.