By Tony Obiechina, Abuja
The Central Bank of Nigeria has stated that banks transfer funds in accounts that have been dormant for at least 10 years into a trust fund account.
This was contained in a recently released exposure draft of guidelines on the Management of Dormant Accounts, Unclaimed Balances and Other Financial Assets in Banks and Other Financial Institutions In Nigeria.
In a circular signed by the Director of the Financial Policy and Regulation Department of CBN, Chibuzor Efobi, it stated that the development comes on the heels of a request by Deposit Money Banks and other stakeholders for the apex bank to clarify procedures concerning the management of dormant and inactive accounts in the country.
CBN called for inputs within three weeks from banks and related stakeholders.
The draft stated that banks and other financial institutions must transfer all unclaimed funds into an Unclaimed Balances Trust Fund pool account, which will be domiciled at the CBN.
CBN explained that the balances would be invested in government securities like Treasury Bills and returned to the beneficiaries within ten days of notice.
CBN said, “The Central Bank of Nigeria shall open and maintain an account earmarked to warehouse unclaimed balances in eligible accounts. The account shall be called the ‘Unclaimed Balances Trust Fund Pool Account.”
The central bank said any bank or financial institution that contravenes any provision of the new guidelines would attract a penalty of not less than N2,000,000.
It added that failure to comply with CBN’s directive in respect of any infraction would attract a further penalty of N200,000 daily until the directive is complied with or as may be determined by CBN.
The CBN said the objectives of the guidelines are to “Identify dormant accounts/unclaimed balances and financial assets with a view to reuniting them with their beneficial owners; hold the funds in trust for the beneficial owners; standardise the management of dormant accounts/unclaimed balances and financial assets; and establish a standard procedure for reclaim of warehoused funds.”
The CBN also said that it would publish an annual list of the owners of the unclaimed balances that had been transferred to the pool account as well as the procedure for reclaim of warehoused funds.
In the signed Finance Act 2020, the Federal Government revealed plans to borrow unclaimed dividends and funds in dormant account balances of Deposit Money Banks. This was disclosed under Part XII of the Companies and Allied Matters Act in the Finance Act.
