CBN to hold dormant account funds lawmakers put at over N1.3 trillion

The Central Bank of Nigeria (CBN) has proposed a new regulation that would allow it take over funds from bank accounts that had been dormant for at least 10 years.

– Key points to note

Banks are expected to mop up such funds and transfer them to the Unclaimed Balances Trust Fund (UBTF) created and domiciled at the CBN.

Owners of the funds can still recover them within 10 working days of confirming ownership through the banks, according to the plan.

– Why this matters

The central bank said it took the decision to respond to inquiries from banks on how to manage such funds, and to curb abuse.

“The continuous maintenance of such accounts results to accumulation of huge unclaimed balances at the disposal of the financial institutions for which the depositors may not be adequately compensated,” the regulator said.

“In addition, dormant and unclaimed balances are increasingly susceptible to fraudulent transactions or abuse.”

A portion of unused funds belong to accounts owned by deceased customers. In March 2022, a House of Representatives committee investigating unclaimed funds in commercial banks said it found N300 billion unclaimed funds in some commercial banks.

The committee said it was hopeful to find more than N1.3 trillion. Banks’ representatives at the event disagreed with the amount.

– Learn more

The CBN proposal is open to suggestions from banks and other financial institutions within three weeks, according to the circular by the CBN’s financial policy and regulation department director, Chibuzo Efobi.

According to the guidelines, money from dormant accounts, unclaimed balances, and other financial assets in savings, current, and other financial assets, including salaries, wages, or commissions, will be transferred to the UBTF Account Pool for CBN safekeeping.

The money from dormant bank accounts will be stored, and the revenues will be used to buy treasury bills and other government securities with the approval of the Unclaimed Balances Management Committee.

Banks that fail to comply face a fine of N2 million and additional N200,000 daily for each section violated until remedied.

In the event of dispute, banks and other financial institutions shall have the responsibility of resolving them within 15 working days.

Customers’ complaints will be eligible to be transferred to the CBN if not resolved within 15 days by commercial banks or if the customer is dissatisfied with their decision.