Billy Timmins (Wicklow, Fine Gael)
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Question 9: To ask the Minister for Finance if he has satisfied himself with the manner in which unclaimed bank drafts are handled by the banking sector. [2544/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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While I do not have a statutory function in this matter, I am aware there are bank drafts which have remained uncashed for various periods. The overall regulation of the banking system is a matter for the Irish Financial Services Regulatory Authority. I have not been made aware by that body or any other organisation that there is any particular dissatisfaction with the way banks issue drafts to their customers.

There is an issue, however, with uncashed bank drafts. The Irish Financial Services Regulatory Authority recently provided some preliminary estimates of the extent of funds in uncashed bank drafts for periods of up to two years. It is firming up these figures and looking at the extent to which such drafts remain uncashed for longer periods. When these figures are available, I will be in a position to consider whether these uncashed amounts should be dealt with as if they were dormant accounts, within the terms of dormant accounts legislation. My Department is examining this issue and is considering the legal issues arising in conjunction with the Attorney General's office. Whatever legislation is appropriate could be accommodated in financial services legislation under development in my Department.

Any legislative amendments would need to recognise the fundamental differences between prepaid instruments, where the customer does not hold an account, and dormant bank accounts. Unlike conventional dormant bank accounts, establishing the beneficial ownership of dormant bank drafts is not straightforward.

Billy Timmins (Wicklow, Fine Gael)
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I appreciate the points raised by the Minister in his reply. I have followed this issue for some years. However, the Department and the Irish Financial Services Regulatory Authority have been reticent with regard to getting involved as they did not see that there is a problem. There is an issue and I am aware that the preliminary figures given may not be as accurate as they should be and they are looking to establish exactly what is there. In many cases, people got bank drafts, which were later forgotten about, and when they passed away, the drafts were uncashed, similar to the situation of dormant accounts. In many cases, the banks know the original holders of these drafts, yet they are not obliged to inform the person and there is no timeframe on the validity of a bank draft. When the Irish Financial Services Regulatory Authority finalises its figures, a substantial amount of money will be involved. The initial figure for two years or older was €98 million, but following the publicity of this issue it will be somewhat less than that. Following the publicity of this issue people who had worked in banks have informed me that they were aware of outstanding bank drafts. Will the Minister examine the concept of putting a time limit on a bank draft? This would put an onus on the financial institutions to contact the holder of the bank draft informing them that its shelf life is coming to an end.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The bank has no way of knowing where the bank draft is if no one presents it. The person to receives it does not have to have a bank account, which creates difficulties. The point is made in terms of investigating the matter to determine the extent of uncashed bank drafts, what are the ownership issues, what advice can be obtained from the Attorney General and what should be the period of dormancy. A number of issues need to be examined. IFSRA is following up the matter and, as soon as it reports back, we can set in train a process to see how the matter can be resolved. If dormancy can be established, what we have done in regard to dormant bank accounts provides us with a model, perhaps not the exact model, which will ensure these moneys are put to good effect.