Momentum is growing for a movement that will allow the Japanese government to take control of accounts that have remained idle at financial institutions for 10 years and above, as Japan’s banking industry has said that they may be agreeable to such a move. Initially, the proposal was made in 2012, when the Democratic Party of Japan was then in power, but the banking industry balked at the idea then, saying there was no legal grounds for such a step. Now that Japan’s banks are on board, the proposal may be closer to reality.
According to information from the banking industry, idle accounts are valued at around 50 billion yen (around US$476 million) per year, and this would be a great boost to the financially strapped Japanese government. The ruling Liberal Democratic Party and its junior coalition partner New Komeito are now planning to submit to the Diet a bill authorizing the government to take control of these idle accounts, with a provision that says that the money should be returned to the account holders at any time they request it. According to the draft of the bill, financial institutions would transfer funds from dormant accounts to the government-backed Deposit Insurance Corp. of Japan for a fee, with the banks handling any request from depositors seeking to get their money back.
Japan’s Cabinet Office is a bit concerned about this proposal being spearheaded by the ruling party rather than the government. To make sure that there is no wasteful spending, the office is saying that there is a need for a proper structure for the proposal, especially since depositors will most likely be sensitive about the plan. Lawmakers have not yet decided how to spend the funds from the accounts, but ideas include using the funds to support new businesses, using the money for welfare, and using the funds for reconstruction from the 2011 earthquake and tsunami.
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