Published and draft legislation - Colombia

Operational issues for “Abandoned Accounts”

Draft Decree from the Treasury & Public Credit Ministry

This bill regulates the transfer, chargeback and investment of funds deposited in accounts that have been abandoned.  

Abandoned accounts were regulated under Law 1777/2016, which defines them as current or savings accounts where no debit or credit movements have taken place for three years, i.e, no deposit, withdrawal or transfer of any kind of transaction during the entire period.

This draft indicates that entities holding “abandoned accounts” must send to The Colombian Educational Credit Institute (ICETEX) a list with a breakdown of abandoned accounts and their balances, which will be transferred to a special fund under ICETEX administration, with the money coming from the abandoned accounts being transferred as mutual funds.  

The first transfer of such funds must take place no later than 1st August 2016, and thereafter every quarter. Subsequently, should any account holders wish to withdraw their money, the entities must let them do so in no more than one day, and should then request a chargeback from ICETEX.

Once the decree comes into force and until 30th June 2016, financial institutions must give information on the provisions of Law 1777/2016 to their account holders with current or savings accounts that have not shown credit or debit movements for three years running, explaining that these will become applicable after 1st August 2016.

The bill also indicates that the transfer of balances against abandoned accounts to the special fund managed by ICETEX will not entail any change in the balances shown in the holders’ statements, nor will it in any way restrict the holders’ ability to draw money against their accounts.  

The draft legislation also establishes that ICETEX will invest a percentage of the funds in sight and term deposits in financial institutions with AA+ or equivalent ratings. An auction will be held every 6 months to define which institutions will receive such sight deposits and every year for term deposits.