The Central Bank of Nigeria (CBN) has taken steps to manage dormant accounts and unclaimed balances in Nigerian banks and financial institutions. The CBN has released draft guidelines that aim to promote transparency, reduce fraudulent activities, and ensure accountability in the banking system.
The guidelines propose that all unclaimed balances in accounts that have been dormant for up to 10 years should be transferred into an Unclaimed Balances Trust Fund (UBTF) pool account, which will be managed by the CBN. The funds in the UBTF will be invested in Nigerian Treasury Bills (NTBs) and other securities as approved by the ‘Unclaimed Balances Management Committee’. Banks and other financial institutions (OFIs) are expected to transfer unclaimed balances quarterly and retain all records of communication regarding the management of dormant accounts for a minimum of 10 years.
In addition, banks and OFIs are required to contact account holders whose accounts are dormant and publish the list of dormant accounts on their websites. They should monitor inactive accounts, notify customers, protect such accounts from unauthorized usage, and establish procedures that will ensure continuous contact with customers to reduce the incidence of inactive/dormant accounts.
Financial institutions are to bear the costs of maintaining inactive and dormant accounts as well as contacting customers. They are also to render quarterly reports on dormant accounts in a prescribed format to the Banking Supervision Department and Other Financial Institutions Supervision Department of the CBN.
The draft guideline is open to input from stakeholders for three weeks. The CBN’s move to manage dormant accounts and unclaimed balances in Nigerian banks is a welcome development that will ensure the safety of funds in the banking system and increase transparency.
