Any use of dormant accounts for the good of society as suggested in the DIRT report is likely to require legislative changes which redefine the legal basis of ownership of bank accounts, a spokesman for the Central Bank, Mr Hugh O'Donnell, said last night.
Mr O'Donnell said the definition of a dormant account was a `fairly grey area' and each bank could have a different opinion of the length of time before an account became dormant. This would probably be after six or seven years without registering a transaction. However, even when a bank labels an account dormant, the depositor retains the legal right of ownership, he said.
"In terms of a bank's balance sheet these accounts have little effect, but, if a bank has a significant number of dormant accounts, it can adjust its risk management strategy," said Mr O'Donnell. It is estimated that millions of pounds lie untouched in dormant accounts in banks in the Republic. However, with no legally accepted definition of a dormant account, and no way to change the legal basis of ownership over a deposit, it would be impossible to redirect these dormant funds to the State. "It's a matter of parlance rather than any legal status. The money remains the liability of the bank so for the State to change ownership it will require legislation," Mr O'Donnell added.