The Central Bank of Nigeria has stated that an account can only be designated as dormant and used for investment purposes if they have not been used for more than ten years.
The apex bank disclosed this on Friday in its recently issued document titled, “FAQs – Guidelines on Dormant Account and Unclaimed Balances – July 25, 2024,” posted on its website.
The Guidelines on the Management of Dormant Accounts, Unclaimed Balances and Other Financial Assets in Banks and Other Financial Institutions in Nigeria is a policy issued by the CBN that seeks to operationalise Section 72 of the Banks and Other Financial Institutions Act, 2020 and standardise the management of dormant accounts and unclaimed balances.
The CBN has released a policy titled “Guidelines on the Management of Dormant Accounts, Unclaimed Balances, and Other Financial Assets in Banks and Other Financial Institutions in Nigeria” with the aim of standardizing the handling of dormant accounts and unclaimed balances while also operationalizing Section 72 of the Banks and Other Financial Institutions Act, 2020.
It was earlier reported that the CBN had said money from inactive accounts, unclaimed amounts in Nigerian Treasury Bills, and other government securities might be invested.
The apex bank stated that it will handle these funds in trust and that it will reimburse beneficiaries for the principal amount as well as any interest that has accumulated within ten working days of receiving a request for reclamation from the financial institution.
It stated, “Dormant accounts are accounts that have been inactive for more than 10 years. Eligible accounts are dormant account balances that have remained with the FIs for 10 years or more.
“These eligible accounts include current, savings, term deposits in local currency, domiciliary accounts, deposits for shares and mutual investments, prepaid card accounts and wallets, government-owned accounts, and others as specified in the Guidelines by the CBN.”
The The CBN also noted that financial institutions were required to inform customers immediately and every quarter when their accounts become inactive or dormant.
The FAQ document read, “The CBN shall establish a dedicated office for this purpose. The office will be supervised by a management committee.”
“The interest payable shall be at a rate to be determined by the CBN from time to time. For non-interest banks, the profit and loss on the unclaimed balances shall be determined by the CBN from time to time.
“The CBN will refund the principal and any interest on the invested funds to the beneficiaries within 10 working days of receiving a reclaim request from the FI.”
The CBN will establish and oversee the “Unclaimed Balances Trust Fund Pool Account,” a special account, in accordance with the new regulations, to hold unclaimed amounts.
The guidelines specify that eligible accounts for dormant status include current, savings, term deposits in local currency, domiciliary accounts, deposits for shares and mutual investments, prepaid card accounts and wallets, and government-owned accounts
In order to reactivate a dormant account, account owners must fill out a reactivation form at their individual financial institution and submit proof of ownership and identity.
However, some accounts are exempt from being considered dormant, such as accounts subject to litigation, judgment debts under active court cases, accounts under regulatory investigation, and encumbered accounts like collaterals and liens.
The CBN Governor, Yemi Cardoso, justified this policy by stating that the latest measure by the apex bank aims to protect the funds in inactive accounts, which are particularly vulnerable to scammers in Nigeria.
