The Central Bank of Nigeria has proposed that banks should transfer funds in accounts that have been dormant for up to 10 years into a trust fund account and other government securities.
This is contained in the just-released exposure draft of guidelines on the management of Dormant Accounts, Unclaimed Balances, and other Financial Assets in Banks and other Financial Institution In Nigeria.
The circular signed by the Director of the Financial Policy and Regulation Department, Chibuzo Efobi, said the apex bank would establish the Unclaimed Balances Trust Fund (UBTF) with a substantive management committee for the proper administration of the money the apex bank added that a further daily penalty of N200,000 will be applied until full compliance.
The apex bank stated: “A contravention of any provision of the guidelines shall attract a penalty of not less than N2 million. Failure to comply with CBN’s directive in respect of any infraction shall attract a further penalty of N200,000 daily until the directive is complied with or as may be determined by CBN.”
Eligible accounts, according to the document are dormant accounts balances that have remained with financial institutions for 10 years and beyond.
Dormant accounts/unclaimed balances and other financial assets in savings, current, term, and domiciliary accounts are affected. Financial assets whether in form of salaries, wages, bonuses, or commissions held in cards and wallets will also be remitted to the UBTF Account Pool for CBN custody.
According to CBN, the guidelines were rolled out in response to the request of banks and other stakeholders for the apex bank to further clarify the procedure for the management of dormant and inactive accounts by banks in Nigeria
The guidelines: “The financial institution shall bear the costs of maintaining inactive and dormant accounts as well as contacting the customers; Render quarterly reports on dormant accounts in a prescribed format to Banking Supervision Department and Other Financial Institutions Supervision Department, CBN; Notify account owners in writing through the agreed medium such as email, text message, and letter immediately an account becomes inactive/dormant; Reactivate dormant accounts upon request by the account owner or his/her legitimate representatives; Continue to reflect dormant account balances as deposit liabilities and such balances, where applicable, shall continue to earn interest until they are transferred to CBN.