Japan to use “dormant” deposits for public benefits

February 1, 2018

Tokyo- Japan will use deposits held in so-called dormant bank accounts to provide subsidies and loans to volunteer groups and nonprofit organizations, the Cabinet Office said Wednesday.

An organization to be designated by the prime minister is expected to check the use of funds from dormant accounts, according to a draft basic policy set by the Cabinet Office.

The draft was presented to a meeting of the Cabinet Office's panel on the use of dormant deposits. The government aims to finalize the policy by the end of March and start utilizing the funds in autumn 2019.

Dormant accounts refer to those with no history of a deposit or a withdrawal for 10 years or longer. Dormant deposits are treated as revenue of financial institutions.

Under the policy, deposits at bank accounts that will be regarded as dormant in January 2019 or later will be used for public benefits. Annually, an estimated 70 billion yen in dormant deposits are generated.

The draft said that dormant deposits should be utilized to support public-interest activities not covered by existing programs. Eligible activities are expected to include assistance to students who refuse to attend school and young people and children who avoid social contact, support for poor families, and regional revitalization projects.

The draft makes it clear that no dormant deposits will be used to implement measures that the central government and municipalities are supposed to carry out.

Dormant deposits will be gathered to the prime minister-designated organization via Deposit Insurance Corp. of Japan. Other organizations to be selected through open recruitment will be tasked with providing funds from dormant accounts to volunteer groups and nonprofit organizations.

The envisaged use of dormant deposits, characterized as a social experiment in the draft policy, will be reviewed in January 2023, five years after the law on the utilization of such deposits took effect. Jiji Press