CBN Orders Transfer of Dormant Accounts to Central Pool
By Patience Ikpeme
The Central Bank of Nigeria has directed all banks and other financial institutions to transfer all dormant accounts, unclaimed balances and other financial assets to its dedicated account.
This aims to identify inactive accounts and reunite them with their rightful owners, set up consistent protocols for account management, and develop a structure for retrieving warehoused funds.
The CBN, however, said the new guidelines which is a review of the guidelines issued in October 2015, exempted dormant accounts, and unclaimed balances under litigation and investigation or encumbered by collateral.
Categories of accounts eligible for this process is set at various deposit types, prepaid cards, government-owned accounts, unclaimed salaries, proceeds from stale drafts, judgment debts, and other financial assets as designated by the CBN that has been dormant after ten years.
The CBN will establish an “Unclaimed Balances Trust Fund (UBTF) Pool Account” to hold dormant funds. A management committee will oversee the account’s operations, issue regulations, monitor compliance, and manage the fund in line with the Banks and Other Financial Institutions Act (BOFIA) 2020.
An annual lists of unclaimed balances transferred to the UBTF Pool Account and outline procedures for reclaiming funds shall be provided by the apex bank and the role of financial institution for all accounts in liquidation will be assumed by the Nigeria Deposit Insurance Corporation.
Financial institutions are hereby to bear the cost of maintaining inactive and dormant accounts, also advised to observe accounts that has been inactive , notify customers, and establish procedures for continuous contact, and give quarterly reports to the CBN.
On the other hand, account owners must inform financial institutions of changes in contact details and submit applications for reclaiming funds in order to make the reclaiming process faster.Financial institutions must formulate policies for recognizing and managing dormant accounts, establish effective controls, and transfer eligible balances to the UBTF Pool Account.
The CBN’s move is expected to enhance transparency and accountability in the management of dormant accounts, protect the interests of account holders, and ensure the efficient utilization of financial resources.
