The Central Bank of Nigeria (CBN) has said that accounts that remain dormant will be moved to its “Unclaimed Balances Trust Fund Pool Account”.
To this effect, the apex bank has released an exposure draft of guidelines for the management of dormant accounts, unclaimed balances and other financial assets in banks and other financial institutions in Nigeria.
The draft guidelines are being issued in response to requests from banks and other stakeholders for further clarification on the procedures for managing dormant and inactive accounts.
The guidelines mandate that the CBN shall open and maintain an account called: “Unclaimed Balances Trust Fund Pool Account” to warehouse unclaimed balances in eligible accounts. The funds in the account will be invested in Nigerian Treasury Bills (NTBs) and other securities as approved by the “Unclaimed Balances Management Committee”.
The scope of the guidelines covers all financial institutions (FI) under the purview of the Central Bank of Nigeria (CBN) and applies to eligible accounts that have been dormant for a period of 10 years and beyond.
Eligible dormant accounts/unclaimed balances and other financial assets include various types of deposits, domiciliary accounts, prepaid card accounts and wallets, proceeds of uncleared and unpresented financial instruments, unclaimed salaries and wages, and other similar assets.
However, the guidelines specify that certain classes of dormant accounts/financial assets are exempted, including government-owned accounts, accounts that are subject to litigation, accounts under investigation by a regulatory authority or law enforcement agency and encumbered accounts.
Before the release of the draft guidelines by the CBN, the treatment of dormant accounts varied across financial institutions in Nigeria. However, in general, dormant accounts were typically left untouched and unmonitored by financial institutions.
This lack of monitoring of dormant accounts often resulted in unclaimed balances, which can create challenges for the stability of the financial system. Unclaimed balances can also cause financial losses for customers who may not be aware that they have balances in dormant accounts.
With the draft guidelines on the management of dormant accounts, unclaimed balances, and other financial assets in banks and other financial institutions in Nigeria, the CBN seeks to address the challenges associated with dormant accounts and unclaimed balances in the Nigerian financial system.
