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CBN moves to claim funds in dormant accounts, orders transfer of account balances

The Central Bank of Nigeria (CBN) has commenced the mopping up of monies in dormant accounts and unclaimed balances in commercial banks.

The apex bank announced this in its new Guidelines on ‘the Management of Dormant Accounts, Unclaimed Balances and other financial assets in Banks and Other Financial Institutions in Nigeria’ drafted in April 2023.

CBN, therefore, directed banks to transfer balances that have remained in a dormant account register for up to 10 years to the Unclaimed Balances Trust Fund (UBTF) pool account.

This directive was contained in a circular signed by Director, financial policy and regulation department of the CBN, Chibuzo Efobi and sent to all banks and other financial institutions (OFIs), on Thursday.

According to the apex bank, the balances will be invested in government securities and would be returned to the beneficiaries not later than ten days of notice.

The new guidelines which take effect immediately repeal the October 7, 2015 Guidelines on the Management of Dormant Accounts and Other Unclaimed Balances by Banks and Other Financial Institutions in Nigeria.

The guidelines read; “The Central Bank of Nigeria shall open and maintain an account earmarked for the purpose of warehousing unclaimed balances in eligible accounts. The account shall be called “Unclaimed Balances Trust Fund Pool Account.”

‘The eligible accounts CBN said are dormant accounts balances that have remained with the FIs for a period of 10 years and beyond.

“The eligible accounts and financial assets are: Current, Savings and Term deposits in local currency; Domiciliary accounts; Deposits towards the purchase of shares and Mutual Investments; Prepaid card accounts and wallets; Proceeds of uncleared and unpresented financial instruments belonging to customers or non-customers of FIs; Unclaimed salaries and wages, commissions, and bonuses.

Others are: “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’s account had not been debited and A judgment debt for which the judgment creditor has not claimed the amount of judgment award.

“Financial Institutions shall treat accounts and financial assets that have become dormant as follows:

“Formulate policies for the recognition and management of dormant accounts and financial assets that are consistent with this guideline and other extant regulations; ii. Establish effective controls to ensure surveillance and second-level authorization on reactivation of dormant accounts, among other measures;

“Maintain a register of dormant accounts balances; Transfer balances that have remained in the dormant account register for up to ten years to the ‘UBTF Pool Account; and Require customers seeking to reactivate dormant accounts to provide evidence of account ownership, valid means of identification, evidence of the present place of residence, and affidavit on the accuracy of the information to reactivate the account.”

CBN said when it receives the unclaimed balances, the apex bank will, “Open and maintain the ‘Unclaimed Balances Trust Fund Pool Account’; Maintain records of the beneficiaries of the unclaimed balances warehoused in the UBTF Pool Account; Invest the funds in Nigerian treasury bills (NTBs) and other securities as may be approved by the ‘Unclaimed Balances Management Committee’;

“Refund the unclaimed funds to the beneficiaries not later than ten (10) working days from the date of receipt of the request. Where it is imperative to extend the timeline, a notice of extension shall be communicated to the requesting FI stating reasons for the extension.”

The CBN said any bank or financial institution that contravenes any provision of the new guidelines would pay a fine of not less than N2,000,000 (Two Million Naira) as a penalty.

Also, failure to comply with its directive in respect of any infraction will attract a further penalty of N200,000 daily.

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