Unclaimed funds to move to MG Account No. 1

Parliament has approved sweeping changes to Malawi’s financial laws, paving the way for a new system that will affect how money left untouched in banks and other financial institutions is managed.

The reforms, passed through a series of financial sector amendment bills, require unclaimed funds to be transferred into Malawi Government (MG) Account No. 1 instead of remaining indefinitely with financial institutions.

However, the legislation guarantees that the rightful owners or their beneficiaries will still be able to claim the money if they come forward in the future.

Presenting the bills in Parliament on Tuesday, Minister of Finance Joseph Mwanamvekha said the amendments harmonise the treatment of unclaimed funds across banks, securities institutions and cooperatives in line with the Public Finance Management Act.

Mwanamvekha explained that funds are only classified as unclaimed after financial institutions have made all reasonable efforts to trace the owners or their next of kin without success.

“Such monies will go to MG Account Number One, but if, after the money has been deposited into MG Account Number One, the owner is found, the Treasury has been given powers to return the money to the bona fide owners,” he said.

He said the reforms are designed to create consistency in the management of unclaimed funds, protect the interests of depositors and strengthen public confidence in Malawi’s financial system.

Supporting the bills, Malawi Congress Party (MCP) spokesperson on Finance Peter Dimba said the amendments align financial sector laws with the Public Finance Management Act of 2022, particularly the provisions governing unclaimed funds.

Dimba said money is only deemed unclaimed after financial institutions have exhausted all efforts to locate the owners and their next of kin.

He said transferring such funds to MG Account No. 1 ensures they can be used for the common good, while the law still allows the Treasury to refund the money if the rightful owners come forward at a later date.