The Central Bank of Nigeria, CBN, has listed accounts that have been inactive for over 10 years as dormant. The apex bank stated that such accounts will be used for investment purposes. It also stated that a dedicated office would be created to manage dormant accounts and unclaimed balances in the country.
CBN made the clarification in its recently issued document titled, “FAQs – Guidelines on Dormant Account and Unclaimed Balances – July 25, 2024,” posted on its website.
The Guidelines on the Management of Dormant Accounts, Unclaimed Balances and Other Financial Assets in Banks and Other Financial Institutions in Nigeria is a policy issued by the CBN that seeks to operationalize Section 72 of the Banks and Other Financial Institutions Act, 2020 and standardize the management of dormant accounts and unclaimed balances.
Recall that the CBN had earlier disclosed that it might invest funds from dormant accounts, unclaimed balances in Nigerian Treasury Bills, and other government securities.
According to the apex bank, it will manage these funds in trust. It would also refunding the principal and any accrued interest to beneficiaries within 10 working days of receiving a reclaim request from the financial institution.
It stated, “Dormant accounts are accounts that have been inactive for more than 10 years. Eligible accounts are dormant account balances that have remained with the FIs for 10 years or more.
“These eligible accounts include current, savings, term deposits in local currency, domiciliary accounts, deposits for shares and mutual investments. Also included are prepaid card accounts and wallets, government-owned accounts, and others as specified in the Guidelines by the CBN.”
The CBN also noted that financial institutions were required to notify customers immediately and every quarter when their accounts become inactive or dormant.
The FAQ document read, “The CBN shall establish a dedicated office for this purpose. The office will be supervised by a management committee.”
“The interest payable shall be at a rate to be determined by the CBN from time to time. For non-interest banks, the profit and loss on the unclaimed balances shall be determined by the CBN from time to time.
“The CBN will refund the principal and any interest on the invested funds to the beneficiaries within 10 working days of receiving a reclaim request from the FI.”
The new guidelines also stated that the CBN will create and manage a dedicated account called the “Unclaimed Balances Trust Fund Pool Account”. This is where the unclaimed balances from the fund are lodged.
The guidelines also specified that eligible accounts for dormant status include current, savings, term deposits in local currency and domiciliary accounts. It also listed deposits for shares and mutual investments, prepaid card accounts and wallets, and government-owned accounts, among the accounts.
It stated that reactivating a dormant account involves account owners completing a reactivation form at their respective financial institutions. The account holder will also provide evidence of ownership and a valid identification.
The guideline, however, stated that some accounts are exempted from being considered dormant. These include accounts subject to litigation, judgment debts under active court cases and accounts under regulatory investigation. It also added encumbered accounts like collaterals and liens.
Recall that in enacting the policy, the CBN Governor, Yemi Cardoso, said dormant accounts in Nigeria are more susceptible to fraudsters. Therefore, it is in an effort to safekeeping the funds in dormant accounts that CBN implementing the policy.
source: Punch
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