The rich fail to claim 2,600 bank safes


Economy

The rich fail to claim 2,600 bank safes


Open the safe in the bank vault. PICTURES | COURTESY

john-mutua-img

Summary

  • The Unclaimed Financial Assets Authority (Ufaa) said the number of safe deposit boxes reported by banks jumped 56%, from 1,691 in June 2020 to 962 in June 2017.
  • It is a worldwide trend for the wealthy to store valuable jewelry, stock certificates, treasury bills, company certificates and personal documents such as land titles, security certificates and certificates of shares in banks.
  • The jump in the number of declared safes comes a year after the value of unclaimed assets reached 54.8 billion shillings, marked by a low rate of reunification of assets with their beneficiaries.

Wealthy individuals and families failed to claim 2,648 safes, although the state does not have a vault to keep the properties secret.

The Unclaimed Financial Assets Authority (Ufaa) said the number of safe deposit boxes reported by banks jumped 56%, from 1,691 in June 2020 to 962 in June 2017.

It is a worldwide trend for the wealthy to store valuable jewelry, stock certificates, treasury bills, company certificates and personal documents such as land titles, security certificates and certificates of shares in banks.

The jump in the number of declared safes comes a year after the value of unclaimed assets reached 54.8 billion shillings, marked by a low rate of reunification of assets with their beneficiaries.

Safes are abandoned if they remain unclaimed for more than two years after the expiration of the lease or rental period.

Ufaa leaders said earlier the law did not provide for how assets other than cash and jewelry found in safe deposit boxes would be handled.

“Our legal mandate is exclusive to cash or cash equivalents…” the authority told parliament.

Safe deposit boxes held by banks have been on the radar of the Central Bank of Kenya (CBK) since March 2019, when detectives seized 2 billion shillings in counterfeit money hidden in one.

The regulator has issued a circular requiring financial institutions to verify the contents of safe deposit boxes in order to combat illegal transactions such as money laundering.

The CBK said that in the future, banks will have to subject safe deposit boxes to rules governing illicit financing, known as anti-money laundering and counter-terrorist financing obligations. .

Ufaa blamed the slow pace of bringing together safes, cash, stocks and other assets to court cases, paperwork and understaffing at the agency.

“Litigation by the Institute of Chartered Accountants of Kenya has resulted in procedural delays in closing incumbent audits and delayed execution,” Ufaa said in a report tabled in parliament.

Punitive fines have also discouraged holders from declaring and turning over assets, prompting the National Treasury to offer one-year relief from fines in a bid to increase compliance.

According to the law, unused assets are supposed to be declared and handed over to Oufaa no later than November 1 each year. Holders do not file any declarations, if any.

Holders risk a fine of 7,000 to 50,000 shillings for each day an idle asset report is withheld or duty is not performed. Holders also pay a fine of 25% of the value of the asset when they fail to hand it over to Ufaa.

The Treasury offered relief on all unused assets that should have been declared and returned to the state before the end of the current financial year.

[email protected]

Previous EU should do 'whatever it takes to help an independent Scotland join'
Next BayCom (NASDAQ:BCML) vs. First Western Financial (NASDAQ:MYFW) Comparison