According to the Central Bank of Nigeria (CBN), all dormant account balances and unclaimed balances in banks will be transferred to a Trust Fund account and eventually invested in Treasury Bills.
This is stated in the recently released exposure draft of guidelines on the management of dormant accounts, unclaimed balances, and other financial assets in Nigerian banks and other financial institutions.
The guideline was developed in response to requests from banks and other stakeholders for the CBN to clarify procedures for the management of dormant and inactive accounts by banks in the country, according to a circular accompanying the exposure draft.
The circular, signed by the Director of Chibuzor Efobi of the apex bank’s Financial Policy and Regulation Department also requested input within three weeks.
According to the draft, banks and other financial institutions (OFIs) will be required to transfer all unclaimed balances in accounts that have been dormant for up to ten years into an Unclaimed Balances Trust Fund (UBTF) pool account that will be domiciled at the CBN.
They are also required to transfer unclaimed balances quarterly, no later than 15 days after the first month of the following quarter, and to keep all communication records on the management of dormant accounts for a minimum of ten years.
The guideline requires banks and OFIs to “keep records of the beneficiaries of unclaimed balances warehoused in their facilities.”
the UBTF Pool Account; invest the funds in Nigerian treasury bills (NTBs) and other securities as approved by the ‘Unclaimed Balances Management Committee’; and refund the unclaimed funds to the beneficiaries within 10 working days of receiving the request.”
According to the exposure draft, banks and other financial institutions are responsible for contacting account holders whose accounts have become dormant and are also required to publish a list of dormant accounts on their website.
Aside from these, financial institutions are also tasked with monitoring “inactive accounts and notifying customers, as well as protecting such accounts from unauthorized usage; Establish procedures to ensure continuous contact with customers in order to reduce the occurrence of Accounts that are inactive or dormant.
“Keep records of procedures and periodic attempts to contact customers with inactive accounts; advise customers in writing on the importance of communicating changes in their names, addresses, phone numbers, emails, and next-of-kin.”
Financial institutions must also bear the costs of maintaining inactive and dormant accounts, as well as contacting customers, and must submit quarterly reports on dormant accounts to the CBN’s Banking Supervision Department and Other Financial Institutions Supervision Department in a prescribed format.
They must “continue to reflect dormant account balances as deposit liabilities, and such balances, where applicable, shall earn interest until transferred to CBN.”
“Keep a register of funds transferred to the CBN for reclaim and an audit trail.” Publish information about all of them on their websites.
dormant accounts, six months before they are eligible for transfer to the CBN. Other financial institutions (OFIs) without websites, on the other hand, must publish the same on the website of their Association.
“Publish the list of dormant account holders in at least two national daily newspapers, with the exception of unit microfinance banks, which must do so on their premises.” The name, address of the branch, and next-of-kin of the account holder are all required to be published. It should also be stated that the account has been transferred to the dormant account register.
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