The CBN has directed that all dormant accounts, unclaimed balances and other financial assets in banks and other financial institutions be transferred to it
It said the new guidelines are sequel to an earlier review in October 2015
It also listed steps to reactivate dormant accounts as well as access unclaimed funds
The Central Bank of Nigeria (CBN) has directed all banks and other financial institutions to transfer all dormant accounts, unclaimed balances and other financial assets that have been dormant for at least 10 years to the CBN.
The CBN disclosed this in a circular released signed by its acting Director of the Financial Policy and Banking Regulation Department, John Onojah, on Friday, July 19, titled, ‘Guidelines on Management of Dormant Accounts, Unclaimed Balances and Other Financial Assets in Banks and Other Financial Institutions in Nigeria.’
It stated that the funds in the dormant accounts, which are bank accounts that have had no financial activity for a long period of time expect for the posting of interest, will be warehoused in a dedicated account known as the Unclaimed Balances Trust Fund Pool Account.
The apex bank added that the funds from dormant accounts, unclaimed balances and financial assets may be invested in Nigerian Treasury Bills and other government securities.
It said, “CBN shall treat unclaimed balances (dormant accounts and financial assets) as follows:
“Open and maintain the ‘UBTF Pool Account,’ maintain records of the beneficiaries of the unclaimed balances warehoused in the UBTF Pool Account.
“Invest the funds in Nigerian Treasury Bills (NTBs) and other securities as may be approved by the ‘Unclaimed Balances Management Committee.’
“Refund the principal and interest (if any) on the invested funds to the beneficiaries not later than 10 working days from the date of receipt of the request and where it is imperative to extend the timeline, a notice of extension shall be communicated to the requesting FI (financial institution) stating reasons for the extension.”
What categories of dormant accounts?
The apex bank said the guidelines aim to identify dormant accounts/unclaimed balances and financial assets with a view to reuniting them with their beneficial owners; hold the funds in trust for the beneficial owners; standardise the management of dormant accounts/unclaimed balances and financial assets and establish a standard procedure for reclaiming warehoused funds.
It said eligible dormant accounts/unclaimed balances and other financial assets include: “current, savings and term deposits in local currency;
“Domiciliary accounts; deposits towards the purchase of shares and mutual investments; prepaid card accounts and wallets.
“Government owned accounts; proceeds of uncleared and unpresented financial instruments belonging to customers or non-customers of FIs; unclaimed salaries and wages, commissions, and bonuses; 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.”
Guidelines sequel to 2015 dormant account review process
The CBN said the new guidelines, which take effect immediately, are follow-up to the conclusion of the review of the guidelines on the management of dormant accounts issued in October 2015.
It will be recalled that in April 2023, the CBN, under Godwin Emefiele, made the proposal, saying the move was to ensure that unclaimed funds in dormant accounts are put to good use, contribute to the development of the Nigerian economy and help to reduce the number of dormant accounts in the banking system.
It said, “The revised guidelines, which operationalises Section 72 of the Banks and Other Financial Institutions Act (BOFIA) 2020, followed engagement and consultations with relevant stakeholders, whose comments and recommendations were considered in the review process.
“It, amongst others, standardises 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 Nigeria.
“The modalities for the transfer of the relevant balances/funds/assets to the CBN, together with the revised templates for the rendition of quarterly returns to Banking Supervision Department or Other Financial Institutions Supervision Department (as the case may be) will be communicated subsequently.”
There are exemptions
The new guidelines, however, exempted dormant accounts and unclaimed balances under litigation and investigation by regulatory authorities or law enforcement agencies or encumbered accounts such as those with liens or used as collateral.
Reactivation and claiming of funds
In order to reactivate a dormant account, the CBN said the account owner or beneficial owner must complete a reactivation form in person and will include the following steps:
“Obtain from the account owner evidence of ownership of the dormant account with valid means of identification, evidence of present place of residence and affidavit on the accuracy of the information to reactivate the dormant account.
“Verify the information provided on the reactivation form; not charge any fee for reactivation of dormant account.
“Reactivate the dormant account with the approval of two authorised officers with one being at least the branch operations manager.
“Reactivate dormant accounts within a maximum of three working days of receipt of a written application to that effect.
“Notify the account owner, free of charge, upon reactivation of the account.”
To access the list of unclaimed balances transferred to CBN on the websites on the other hand, the account owner/beneficial owner shall provide evidence of account ownership, valid means of identification, evidence of the present place of residence, and an affidavit on the accuracy of the information to reactivate the account.
“The profit and loss ratio on the unclaimed balances for non-interest banks shall be determined by the CBN from time to time;
“The FIs shall verify the claim and initiate the request with supporting documents to CBN within 10 working days;
“Application for reclaim shall be to the director banking services department, CBN;
“CBN shall refund unclaimed balance to the account owners/beneficial owners through their FIs within 10 working days from the date of the receipt of the FI’s request.
“Beneficial owners shall not make partial claims; and the right of beneficial owners to reclaim shall be indefinite.”
Explainer: Did CBN’s strategies really reduce inflation by 50% m-o-m between February and May?
Meanwhile, TheRadar had reported that CBN governor, Olayemi Cardoso, on Thursday, July 12, stated that the strategies of the bank have been working, leading to a 50 per cent reduction in inflation month-on-month between February and May 2024.
Cardoso, who assured that “in a not too distant future, things will begin to moderate,” added that the interest rate hikes by the Monetary Policy Committee (MPC) have been instrumental in taming inflation within the period and that the rates will come down soon.
