Banking Sector
CBN Proposes Trust Fund Account for Dormant Bank Accounts in Nigeria
The Central Bank of Nigeria (CBN) has proposed a new measure for the management of dormant bank accounts, unclaimed balances, and other financial assets in banks and other financial institutions in Nigeria.
According to the recently released exposure draft of guidelines, banks will be required to transfer funds in accounts that have been dormant for up to 10 years into an Unclaimed Balances Trust Fund pool account.
The apex bank stated that the move was in response to requests from banks and other stakeholders for clarification on the procedures for the management of dormant and inactive accounts in the country.
The draft guidelines also require banks to transfer all unclaimed funds into the trust fund account, which will be domiciled at the CBN and invested in government securities like Treasury Bills.
The CBN stated that the balances would be returned to the beneficiaries not later than ten days of notice, and failure to comply with the directive would attract a penalty of not less than N2,000,000.
The objectives of the guidelines include identifying dormant accounts and unclaimed balances, standardizing their management, and establishing a standard procedure for the reclaim of warehoused funds.
The proposed measure is part of the CBN’s effort to improve transparency and accountability in the Nigerian financial system.
It also aligns with the Federal Government’s plans to borrow unclaimed dividends and funds in dormant account balances of Deposit Money Banks, as revealed in the Finance Act 2020.
While stakeholders have expressed mixed reactions to the proposed measure, it is expected to increase trust in the financial system, improve financial inclusion, and protect the rights of account holders.
The CBN has called for inputs from stakeholders, which should be sent within three weeks.
The apex bank also announced plans to publish an annual list of the owners of unclaimed balances transferred to the pool account and the procedure for reclaiming warehoused funds.