The Central Bank of Nigeria (CBN) has directed deposit money banks (DMBs) and other financial institutions (OFIs) to start depositing unclaimed balances and funds in dormant accounts of their customers to a pool account created by it as part of its ongoing measures to improve the nation’s financial system efficiency.
The apex bank gave this directive in its just released Guidelines on Management of Dormant Accounts, Unclaimed Balances and Other Financial Assets in Banks and Other Financial Institutions in Nigeria
A circular signed by the CBN’s Acting Director, Financial Policy and Regulation Department, John Onojah, indicated that the guidelines were issued to standardize the management of dormant accounts, unclaimed balances and financial assets, and outlines the procedure for the administration of these balances, funds, and assets by banks and other financial institutions in the country.
According to the circular, account balances in DMBs that have been dormant for a period of 10 years will be transferred into the pool account/ however, banks are expected to publish on their websites, details of all dormant accounts, six months prior to their eligibility for transfer to CBN.
The guidelines further stated that eligible accounts were dormant accounts balances that had remained with the FIs for a period of 10 years and beyond. These include current, savings and term deposits in local currency as well as domiciliary accounts.
Similarly, deposits towards the purchase of shares and mutual investments; prepaid card accounts and wallets; Government Owned Accounts; proceeds of un-cleared and un-presented financial instruments belonging to customers or non-customers of financial institutions, unclaimed salaries and wages, commissions, and bonuses will be eligible for transfer.
Others transfers covered by the guidelines include proceeds of stale local and/or foreign currency drafts not presented for payment by beneficiaries; funds received from a correspondent bank without sufficient details as to the rightful beneficiary and/or a recall of funds made to the remitting bank to which the Nigerian bank account had not been debited; a judgment debt for which the judgment creditor has not claimed the amount of judgment award; and any other deposits or financial assets that may be designated by CBN.
However, the apex bank maintained that accounts that are subject of litigation; a judgment debt for which the judgment creditor has not claimed the amount of judgment award and the case is still active in Court; accounts under investigation by a regulatory authority or law enforcement agency; and encumbered accounts including, but not limited to, collaterals and liens were exempted
Available data from the CBN had earlier indicated that the estimated dormant account balances in Nigerian banks had accumulated to over N20 trillion.
With an estimated nearly 20 million inactive bank accounts in the country, the CBN directed banks to begin transferring funds in dormant accounts into the “Unclaimed Balances Trust Fund (UBTF) Pool Account domiciled with it.
Also, data from the Nigeria Interbank Settlement System (NIBSS) showed that there were 19.799 million dormant bank accounts at the end of Q1 this year, representing 6.81% of all bank accounts in the country.
