British Banks Back Plans to Establish Charity Bank

Charity News Online

The UK banking community welcomed a government-led proposal to set up a "social investment bank" that would reinvest unclaimed assets lying dormant in banks and building societies into the community, but shareholder groups warned more needed to be done first to track down the owners of the funds.

The government-led Commission on Unclaimed Assets launched a formal consultation paper Wednesday in which it proposed to set up an independent financial institution to channel unclaimed funds to charities and community organizations in the form of equity investment, bonds and financial advice, The Guardian reported.

The banks, whose unclaimed assets are usually added into their annual profit and loss account, broadly supported the plan. The British Bankers' Association said it welcomed the consultation paper "as a valuable contribution to the debate on how unclaimed assets could be reinvested in the community". But Tim Marshall, managing director of the Shareholder Partnership, which tracks down individuals whose funds are dormant, said: "We think that turning over the money is great, but there needs to be a more proactive attitude to finding the people involved."

A spokesman for the commission said consumers would be able to reclaim their assets at any time, even after they had been reinvested. He said a number of initiatives were being examined to locate people. "More people than before are going to get in touch with the money they lost as a result of our initiative." The consultation period is expected to last until the end of the year, with a draft proposal possible before March 2007.

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