CBN directs banks to deposit unclaimed balances, funds in dormant accounts

The Central Bank of Nigeria (CBN) has directed banks and other financial institutions to deposit unclaimed balances and funds in dormant accounts to the apex bank accounts.

CBN also issued regulatory guidelines for account owners and beneficial owners to recover their funds dormant for up to 10 years.

The apex bank outlined the regulations in a document on Friday 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 remained inactive for at least one year.

The apex bank said the revised guidelines are a sequel to the conclusion of the review of the guidelines on the management of dormant accounts issued in October 2015.

“The revised Guidelines, which operationalizes Section 72 of the Banks and Other Financial Institutions Act (BOFIA) 2020, followed engagement and consultations with relevant stakeholders, whose comments and recommendations were considered in the review process,” CBN said.

“It, amongst others, standardises the management of dormant accounts, unclaimed balances and financial assets, and outlines the procedure for the administration of these balances, funds, and assets by banks and other financial institutions in Nigeria.

“The modalities for the transfer of the relevant balances/funds/assets to the CBN, together with the revised templates for the rendition of quarterly returns to Banking Supervision Department or Other Financial Institutions Supervision Department (as the case may be) will be communicated subsequently.”

The financial regulator further said the guidelines supersede the previous guidelines, adding that they take effect immediately.

REUNITING FUNDS FOR BENEFICIAL OWNERS

In the document, 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; Standardize the management of dormant accounts/unclaimed balances and financial assets,” the apex bank said.

“Establish a standard procedure for reclaim of warehoused.”

10 YEARS DORMANCY 

According to the financial regulator, eligible accounts are dormant account balances that have remained with the institution for 10 years and beyond.

“Eligible dormant accounts/unclaimed balances and other financial assets shall include: Current, Savings and term deposits in local currency,” CBN added.

“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 will open and maintain an account earmarked for the purpose of warehousing unclaimed balances in eligible accounts. 

The account shall be called the ‘Unclaimed Balances Trust Fund (UBTF) Pool Account’. 

In addition, the CBN shall establish a management committee to oversee the operation of the UBTF pool account, monitor and enforce compliance with these guidelines; and manage the funds in line with the provisions of BOFIA 2020;

Other stakeholders of the unclaimed accounts are the Nigeria Deposit Insurance Corporation (NDIC) and financial institutions.

REACTIVATION, UNCLAIMED FUNDS 

To reactivate a dormant account, CBN said the account owner or beneficial owner must complete a reactivation form in person.

“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 apex 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.”

Also, to access the list of unclaimed balances transferred to CBN on the websites, the account owner/beneficial owner shall provide evidence of account ownership, valid means of identification, evidence of the present place of residence, and an affidavit on 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.”

CBN said monitoring and enforcement of banks and financial institutions will be through off-site surveillance as well as on-site routine and target examinations.