The Central Bank of Nigeria (CBN) has directed banks and other financial institutions to deposit unclaimed balances and funds in dormant accounts into central bank accounts.
The CBN also issued regulatory guidelines for account holders and beneficiaries to recover dormant funds for up to 10 years.
The central bank set out the regulations on Friday in a document titled ‘Guidelines on Management of Dormant Account, Accounts, Unclaimed Balances and Other Financial Assets In Banks And Other Financial Institutions in Nigeria’.
A dormant account is a bank account that has not been used for at least one year.
The central bank said the revised guidelines are a continuation of the outcome of a review of the dormant account management guidelines issued in October 2015.
“The revised guidelines implementing section 72 of the Banks and Other Financial Institutions Act, 2020 (BOFIA) are the result of engagement and consultation with relevant stakeholders and the review process took into account their comments and recommendations,” the CBN said.
“These, among other things, standardize the management of dormant accounts, unclaimed balances, and financial assets and outline procedures for the management of these balances, funds, and assets by banks and other financial institutions in Nigeria.”
The financial regulator further stated that the guidelines replace the previous guidelines, adding that they take immediate effect.
Reuniting Dormant Funds with Beneficiaries
The CBN explained in the document that the objective of the guidelines is to “identify dormant accounts/unclaimed balances and financial assets with a view to reuniting them with their beneficial owners”.
To manage funds held in trust for the beneficiaries.
The central bank said it will “Hold the funds in trust for the beneficial owners; Standardize the management of dormant accounts/unclaimed balances and financial assets,”
“Establish a standard procedure for reclaim of warehoused.”
Ten Years of Dormant Funds:
According to the Financial Conduct Authority, eligible accounts are dormant account balances that have remained with financial institutions for more than 10 years.
“Eligible dormant accounts/unclaimed balances and other financial assets shall include: Current, Savings and term deposits in local currency,” he revealed
Domiciliary accounts; deposits towards the purchase of shares and mutual investments; Prepaid card accounts and wallets; Government owned accounts”
“Proceeds of uncleared and unpresented financial instruments belonging to customers or non-customers of FIs.”
Furthermore, the CBN said it would open and maintain accounts dedicated to the safekeeping of unclaimed balances of eligible accounts.
The name of this account will be the ‘Unclaimed Balances Trust Fund (UBTF) Pool Account’
Further, the CBN shall establish a Management Committee to oversee the operation of the UBTF Pooled Account, monitor and enforce compliance with these policies, and manage the funds in accordance with the provisions of BOFIA 2020.
Other stakeholders in the unclaimed accounts include the Nigerian Deposit Insurance Corporation (NDIC) and financial institutions.
Unclaimed Balance Activation:
According to the CBN, to reactivate a dormant account, the account holder or beneficiary must personally complete a reactivation form.
“Obtain from the account owner evidence of ownership of the dormant account with valid means of identification, evidence of present place of residence, and affidavit on the accuracy of the information to reactivate the dormant account,” the central bank said.
“Verify the information provided on the reactivation form; Not charge any fee for reactivation of dormant account.”
“Reactivate the dormant account with the approval of two (2) authorized officers with one being at least the branch operations manager.”
“Reactivate dormant accounts within a maximum of three (3) working days of receipt of a written application to that effect.”
“Notify the account owner, free of charge, upon reactivation of the account.”
To access the list of unclaimed funds remitted to CBN on the website, the account holder/beneficiary must also present proof of ownership of the account, a valid identity document, current proof of residence, and an affidavit of the accuracy of the information to reactivate the account.
The profit and loss ratio on the unclaimed balances for non-interest banks shall be determined by the CBN from time to time;
“The FIs shall verify the claim and initiate the request with supporting documents to CBN within ten (10) working days;”
“Application for reclaim shall be to the director banking services department, CBN;”
“CBN shall refund unclaimed balance to the account owners/beneficial owners through their FIs within ten (10) working days from the date of the receipt of the FI’s request.”
“Beneficial owners shall not make partial claims, and the right of beneficial owners to reclaim shall be indefinite.”
The CBN said monitoring and enforcement of regulations on banks and financial institutions is carried out through external monitoring and regular and targeted on-site audits.
