At its meeting today, the Government considered and approved proposals from the Minister for Finance, Mr. Charlie McCreevy T.D. on the issue of funds in dormant accounts in all financial institutions except credit unions.

The Government approved the initiation of a consultative process with the financial services sector on the detailed basis for the operation of the scheme. Such consultations, which will include the definition of a dormant account, will take place over the course of the next month. In the light of such consultations, the Minister intends to bring forward legislation to give effect to the final proposals.

A primary aim of the proposed scheme is to return dormant funds to their legitimate owners. There are many reasons why accounts become dormant. These include: forgetfulness; emigration; death; change of address and so on. To the extent that the legitimate owners cannot be traced, the funds will be taken into the care of the State and used for charitable purposes or for stated purposes of societal and community benefit. The legitimate owners of accounts remitted to the care of the State will, of course, have full rights to reclaim them.

The proposed scheme would require financial institutions such as banks, building societies, the Post Office Savings Bank and insurance companies to make a return to the State by the end of June each year of all dormant accounts held by them. The institutions will be further required to use their best endeavours to make contact with these account holders and inform them that their accounts had been included in the returns and informing them that if no customer-initiated transaction takes place within six months, the amounts in the accounts will be remitted to the care of the State.

A Board of Trustees will disburse any surplus funds - over and above what is required to meet possible refunds - for charitable purposes, or purposes of societal and community benefit. The Board of Trustees will be appointed by the Government. The funds will be managed by the NTMA.

The right to privacy which currently exists between financial institutions and their customers will be fully protected under the proposals. No information regarding the original ownership of dormant accounts will be made publicly available.

The Public Accounts Committee Report "Parliamentary Enquiry into DIRT" referred to dormant accounts, and recommended that legislation be prepared to enable dormant funds to be "used for specified purposes of societal and community benefit".