CBN directs banks to transfer unclaimed balances and funds in dormant accounts

The Central Bank of Nigeria (CBN) has mandated banks and other financial institutions to transfer unclaimed balances and funds from dormant accounts to accounts held by the apex bank.

 

The CBN has also released regulatory guidelines for account holders and beneficiaries to reclaim funds that have been dormant for up to a decade. These regulations were detailed in a document released on Friday titled “Guidelines on Management of Dormant Accounts, Unclaimed Balances, and Other Financial Assets in Banks and Other Financial Institutions in Nigeria.”

 

A dormant account is defined as one that has been inactive for at least one year. According to the CBN, the revised guidelines are an update to the ones issued in October 2015, reflecting the latest conclusions from their review process. These new guidelines supersede the previous ones and are effective immediately.

 

The primary aim of these guidelines is to “identify dormant accounts/unclaimed balances and financial assets with a view to reuniting them with their beneficial owners.” Eligible accounts include those with balances that have remained dormant for 10 years or more.

To manage these funds, the CBN will establish an account known as the ‘Unclaimed Balances Trust Fund (UBTF) Pool Account’. A management committee will oversee the operation of this account, ensuring compliance with the guidelines and managing the funds according to the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020. Key stakeholders involved in this process include the Nigeria Deposit Insurance Corporation (NDIC) and financial institutions.

 

For account reactivation, the CBN requires account owners or beneficiaries to complete a reactivation form in person. To access the list of unclaimed balances transferred to the CBN, individuals must provide proof of account ownership, a valid means of identification, evidence of current residence, and an affidavit confirming the accuracy of the provided information.

The CBN has stated that it will enforce compliance through both off-site surveillance and on-site routine and targeted examinations of banks and financial institutions.

 

This move aims to streamline the management of dormant accounts and unclaimed balances, ensuring these funds are securely held and accessible to their rightful owners.

 

It read;

 

“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.

“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.

“Hold the funds in trust for the beneficial owners; Standardize the management of dormant accounts/unclaimed balances and financial assets. Establish a standard procedure for reclaim of warehoused.

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

“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.

“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.

 

“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.  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.”