The Central Bank of Nigeria has emphasised that only accounts that have been idle for more than ten years can be classed as dormant and used for investment reasons.
It further indicated that a separate agency would be established to oversee dormant accounts and unclaimed funds.
The apex bank announced this in a recently produced paper titled “FAQs – Guidelines on Dormant Accounts and Unclaimed Balances – July 25, 2024,” which was uploaded on its website.
The CBN’s Guidelines on the Management of Dormant Accounts, Unclaimed Balances, and Other Financial Assets in Banks and Other Financial Institutions in Nigeria are a policy that aims to put Section 72 of the Banks and Other Financial Institutions Act, 2020 into action and standardise the management of dormant accounts and unclaimed balances.
The CBN had previously stated that it may invest funds from dormant accounts, unclaimed balances in Nigerian Treasury Bills, and other government securities.
The apex bank says it will manage these money in trust and repay the principal and any accumulated interest to beneficiaries within 10 working days of receiving a reclaim request from the financial institution.
It claimed, “Dormant accounts are those that have been inactive for more than ten years.” Dormant account balances that have been with the FI for 10 years or longer are considered eligible.
“These eligible accounts include current, savings, term deposits in local currency, domiciliary accounts, deposits for shares and mutual investments, prepaid card accounts and wallets, government-owned accounts, and others as specified in the Guidelines by the CBN.”
The CBN further stated that financial institutions were expected to notify consumers immediately and quarterly when their accounts became inactive or dormant.
“The interest payable will be at a rate decided by the CBN from time to time. For non-interest banks, the CBN will evaluate the profit and loss on unclaimed amounts on a regular basis.
“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.”
According to the new instructions, the CBN would establish and operate a separate account known as the “Unclaimed Balances Trust Fund Pool Account” to store unclaimed sums.
The guidelines state that acceptable accounts for inactive status include current, savings, term deposits in local currency, domiciliary accounts, deposits for shares and mutual investments, prepaid card accounts and wallets, and government-owned accounts.
To reactivate a dormant account, account owners must complete a reactivation form at their respective financial institutions and provide proof of ownership and valid identity.
Some accounts, however, are immune from being declared dormant, including those subject to litigation, judgement debts in active court proceedings, accounts under regulatory inquiry, and encumbered accounts such as collaterals and liens.
Justifying this policy, CBN Governor Yemi Cardoso stated that dormant accounts in Nigeria are more vulnerable to fraudsters, and the apex bank’s latest regulation is intended to protect funds held in dormant accounts.
Comments are closed.