Billy Timmins
Question:6 Mr. Timmins asked the Minister for Finance if his Department has carried out a study into the administration of bank drafts; and if he will make a statement on the matter. [18868/01]
Other Questions. - Administration of Bank Drafts.
I understand that details such as name and address of the purchaser are retained at the relevant branch for a period of time which is determined by the data retention policy of the relevant credit institution. In general, details of the names of intended recipients of bank drafts are also retained at branch level. The retention period for these details is also defined by the individual institution. Aggregate data of bank drafts outstanding is not currently compiled. Therefore, an estimate of the value of bank drafts outstanding is not available.
I know Deputy Timmons previously expressed an interest in including bank drafts in the dormant accounts scheme. As I explained to the Deputy last week on Second Stage of the Dormant Accounts Bill, it would be premature to include bank drafts. Major legal issues such as the implications of the Statute of Limitations need to be considered. Consequently, I do not intend including them within the ambit of the scheme at present. However, the scheme may be extended to other products at a later stage and further consideration will be given to the inclusion of bank drafts when the relevant issues have been considered.
I thank the Minister for his reply. I now understand why bank drafts are not covered by the dormant accounts legislation. I raised this issue several times with the Minister and he is probably tired of me doing so. However, I must continue to press the issue. Does the Minister agree that hundreds of millions of pounds may be available by way of uncashed bank drafts? Would he agree that it might be a useful exercise for his Department to contact banks and ask them if, as a matter of courtesy, they would inform the Department of the amount of money contained in uncashed bank drafts, particularly those that are over ten years old? I am confident that some bank drafts are at least 50 years old.
There is also a fraud dimension to this issue. I am concerned that a lot of money has been siphoned into bank drafts and that some individuals are waiting for an opportune time to cash these drafts.
When the Dormant Accounts Bill is enacted, banks and other institutions will have to do a lot of work over the next year to comply with the legislation. I will ask banks to make some estimate of the amount of money which may be contained in outstanding bank drafts. That will be a difficult process as the recipient, and not the purchaser, owns the draft. Banks may no longer have records of the intended recipients. When time permits and banks complete their work regarding the dormant accounts legislation, the next issue we will try to address is to obtain an estimate of the value of outstanding bank drafts.
I suspect that records in some institutions may not go back very far. However, on Committee Stage of the Dormant Accounts Bill a Deputy drew attention to the fact that it had been suggested that banks did not keep records going back for a few years, yet other fora discovered that such records go back 20 or 30 years. Perhaps information is available, but it will be a major undertaking. I will have this matter investigated further when the dormant accounts legislation is up and running.
I thank the Minister. I corresponded with the banks some months ago on this issue. A major bank, which is not one of the two largest banks, gave me some information. If this bank can do so, the major banks should be able to do likewise. I am confident that, at the press of a button, the major banks would be able to do so. These banks have cleaned up their act in the past year or two and they would be able to identify the amount of money involved. I would be interested to know how much is involved.