The Central Bank of Nigeria (CBN) has proposed that banks transfer funds in accounts that have been dormant for up to 10 years into a trust fund account which will ultimately be invested in treasury bills.
The move comes in response to requests from banks and other stakeholders for the CBN to clarify the procedures for the management of dormant and inactive accounts by banks in the country.
Nigeria Inter-Bank Settlement System data recently showed that, of 191.4 million bank accounts, active bank accounts in the country stood at 133.5 million as of December 2021.
The CBN in a circular dated 6 April and signed by the Director of Financial Policy and Regulation Department of the apex bank, Chibuzor Efobi, said the guideline takes effect immediately.
The circular also called for inputs from stakeholders, which should be sent within three weeks.
The guideline states that banks and Other financial institutions (OFIs) are expected to transfer all unclaimed balances in accounts that have been dormant for up to 10 years into an Unclaimed Balances Trust Fund (UBTF) pool account which will be domiciled at the CBN. The funds in the account will then be invested in Treasury Bills.
The CBN listed the eligible dormant accounts and unclaimed balances to include current, savings, and term deposits, domiciliary accounts, prepaid card accounts, and more. The category also includes unclaimed salaries and wages, proceeds of stale local and foreign currency drafts, and judgment debts that have not been claimed by the creditor.
The bank said it reserves the right to designate any other deposits or financial assets to be included in the list of eligible dormant accounts.
This move is aimed at ensuring that unclaimed monies in dormant accounts are put to good use and will contribute to the development of the Nigerian economy, it said, adding that it will also help to reduce the number of dormant accounts in the banking system.
The CBN also assured that the inputs of experts and other concerned parties will be considered before the final guidelines are issued.
READ ALSO: CBN warns public against fake recruitment portal
The bank said the objectives of the guidelines are 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 reclaim of warehoused funds.”
In the new guidelines, the apex bank stated that any bank or financial institution that violates the provisions will face a penalty of no less than N2,000,000.
The central bank also warned that failure to adhere to its directives regarding any breach would result in an additional daily penalty of N200,000 until compliance is achieved or as decided by the central bank.
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The Central Bank of Nigeria (CBN) has proposed that banks transfer funds in accounts that have been dormant for up to 10 years into a trust fund account which will ultimately be invested in treasury bills.
The move comes in response to requests from banks and other stakeholders for the CBN to clarify the procedures for the management of dormant and inactive accounts by banks in the country.
Nigeria Inter-Bank Settlement System data recently showed that, of 191.4 million bank accounts, active bank accounts in the country stood at 133.5 million as of December 2021.
The CBN in a circular dated 6 April and signed by the Director of Financial Policy and Regulation Department of the apex bank, Chibuzor Efobi, said the guideline takes effect immediately.
The circular also called for inputs from stakeholders, which should be sent within three weeks.
The guideline states that banks and Other financial institutions (OFIs) are expected to transfer all unclaimed balances in accounts that have been dormant for up to 10 years into an Unclaimed Balances Trust Fund (UBTF) pool account which will be domiciled at the CBN. The funds in the account will then be invested in Treasury Bills.
The CBN listed the eligible dormant accounts and unclaimed balances to include current, savings, and term deposits, domiciliary accounts, prepaid card accounts, and more. The category also includes unclaimed salaries and wages, proceeds of stale local and foreign currency drafts, and judgment debts that have not been claimed by the creditor.
The bank said it reserves the right to designate any other deposits or financial assets to be included in the list of eligible dormant accounts.
This move is aimed at ensuring that unclaimed monies in dormant accounts are put to good use and will contribute to the development of the Nigerian economy, it said, adding that it will also help to reduce the number of dormant accounts in the banking system.
The CBN also assured that the inputs of experts and other concerned parties will be considered before the final guidelines are issued.
READ ALSO: CBN warns public against fake recruitment portal
The bank said the objectives of the guidelines are 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 reclaim of warehoused funds.”
In the new guidelines, the apex bank stated that any bank or financial institution that violates the provisions will face a penalty of no less than N2,000,000.
The central bank also warned that failure to adhere to its directives regarding any breach would result in an additional daily penalty of N200,000 until compliance is achieved or as decided by the central bank.
Support PREMIUM TIMES’ journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.
Donate
TEXT AD: Call Willie – +2348098788999