The Central Bank of Nigeria has recommended that banks move money from accounts that have been inactive for up to ten years into a trust fund account.
The first draft of the guidelines on the management of dormant accounts, unclaimed balances, and other financial assets in Nigerian banks and other financial institutions was just issued, and it contains this information.
The exposure draft was accompanied by a circular that stated the CBN had been asked by banks and other stakeholders to clarify the processes for the management of dormant and inactive accounts by the country’s banks.
The circular, which was signed by Chibuzor Efobi, the director of the apex bank’s financial policy and regulation department, also requested inputs that were to be delivered in three weeks.
According to the draft, banks and other financial institutions must deposit all unclaimed money in a pool account for the Unclaimed Balances Trust Fund that would be kept at the CBN.
The balances will be invested in government assets like Treasury Bills, according to the apex bank, and would be remitted to the recipients with no later than ten days’ notice.
CBN said, “The Central Bank of Nigeria shall open and maintain an account earmarked for the purpose of warehousing unclaimed balances in eligible accounts. The account shall be called ‘Unclaimed Balances Trust Fund Pool Account.”
The proceeds of uncleared and unpresented financial instruments belonging to customers or non-customers of FIs, as well as unclaimed salaries and wages, commissions, and bonuses, are among the eligible accounts and financial assets. These include current, savings, and term deposits in local currency; domiciliary accounts; deposits toward the purchase of shares and mutual investments; prepaid card accounts and wallets.
A judgment debt for which the judgment creditor has not collected the full amount of the judgment award is another example. Other examples include proceeds of expired local and/or foreign currency drafts that beneficiaries have not presented for payment; funds received from a correspondent bank without sufficient information regarding the rightful beneficiary; and/or a recall of funds made to the remitting bank to which the Nigerian bank’s account has not been debited.
Any bank or financial organization that violates the new criteria would be subject to a fine of at least N2,000,000, according to the central bank.
It further stated that any violation of CBN’s direction would result in additional fines of N200,000 daily until the directive is followed or as otherwise determined by CBN.
The CBN stated that the goals 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; and establish a standard procedure for reclaiming of warehoused funds.”
Additionally, the CBN announced that it would publish a yearly list of the owners of the unclaimed sums that had been moved to the pool account as well as instructions on how to retrieve funds that had been stored.
The Federal Government announced plans to borrow money from deposit money banks’ inactive account balances and unclaimed profits in the Finance Act 2020, which was just signed into law. This was revealed in the Finance Act in accordance with Part XII of the Companies and Allied Matters Act.
The Socio-Economic Rights and Accountability Project filed a lawsuit in 2021 after receiving backlash from stakeholders in response to the action.
