Issues and Challenges of Managing Unclaimed Moneys in Malaysia

Abstract

The issue of unclaimed money within companies has emerged as a critical concern for financial regulators, stakeholders, and corporate entities both in Malaysia and globally. According to a report by the New Straits Times (2023), a total of RM11 billion of unclaimed money remained unclaimed in 2023 and this amount is increasing every year. Unclaimed money includes salaries, bonuses, commissions, and other payments made to employees; dividends and profits declared for distributions; insurance claims; tender deposits; and various creditors or debtors with a credit balance. In Malaysia, the management of unclaimed money has become increasingly complex, necessitating more stringent oversight in managing the funds. The Malaysian Accountant General's Department (ANM), who manages unclaimed money, had made some efforts to locate the rightful owners and return their unclaimed funds. The purpose of this research is to examine the existing frameworks in managing unclaimed money, highlighting the unique challenges faced in Malaysia while also drawing necessary recommendations to address the challenges. A semi-structured interview was conducted to collect primary data that includes a comprehensive review of regulatory policies, industry practices, and case studies. This study proposes a strategic roadmap in managing the unclaimed money. The findings suggest that a standardized approach, integrated with technological advancements and stricter regulatory oversight, can significantly improve the tracking and managing of unclaimed money. It is believed that unclaimed money has the potential to benefit the owner, society, and the government for socio-economic and national development. This paper concludes with recommendations for policymakers and corporate entities in Malaysia and around the world to adopt more robust systems that ensure unclaimed money are appropriately managed and reported thereby, increasing the rate of refund of unclaimed money to the rightful claimants and their next of kin