The Central Bank of Nigeria (CBN) has issued a directive to all banks and other financial institutions, ordering them to transfer funds from dormant accounts to the apex bank. The directive, which takes effect immediately, applies to accounts that have remained inactive for a period of ten years or more.
In a circular released on Friday, the CBN stated that the move is aimed at ensuring proper management of unclaimed balances and other financial assets in the banking sector. The funds transferred to the CBN will be held in an “Unclaimed Balances Trust Fund (UBTF) Pool Account” and managed by the apex bank.
The CBN further explained that account owners and beneficiaries will still be able to recover their funds by following the guidelines outlined in the “Guidelines on Management of Dormant Account and Unclaimed Fund” document. This decision follows a review of the existing guidelines on the management of dormant accounts, which were last updated in October 2015.
A circular by CBN Ag. Director of Financial Policy and Regulations, Mr. John Onoja, last night indicated that accounts that have remained dormant for 10 years and above would be affected.
It said, “The provisions of this guideline shall apply to all financial institutions under the purview of the Central Bank of Nigeria.”
The apex bank said that the objectives of these guidelines, among others, were 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 added, “Eligible accounts are dormant account balances that have remained with the FIs for a period of ten (10) years and beyond.
“Eligible dormant accounts/unclaimed balances and other financial assets shall include: current, savings, and term deposits in local currency; Domiciliary accounts; deposits towards the purchase of shares and mutual investments; and 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.”
The following classes of dormant accounts/financial assets are exempted: 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 rt; Accounts under investigation by a regulatory authority or law enforcement agency; and encumbered accounts, including, but not limited to, collateral and liens.
