CBN to create new office to manage dormant account funds

The Central Bank of Nigeria (CBN) has disclosed that it will create a dedicated office to manage dormant accounts and unclaimed balances. 

This is according to the CBN’s recently issued document, “FAQs – Guidelines on Dormant Account and Unclaimed Balances – July 25, 2024,”. 

It read: “The CBN shall establish a dedicated office for this purpose. The office will be supervised by a Management Committee.” 

CBN to release interests from invested funds after account reactivation

According to the apex bank, it will manage these funds in trust, refunding the principal and any accrued interest to beneficiaries within ten working days of receiving a reclaim request from the financial institution.  

The FAQ document read: “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 ten (10) working days of receiving a reclaim request from the FI.” 

The CBN also noted that financial institutions are required to notify customers immediately and on a quarterly basis when their accounts become inactive or dormant.  

Reactivating a dormant account involves account owners completing a reactivation form at their respective financial institutions, providing evidence of ownership and valid identification.  

For unclaimed balances, financial institutions must transfer these funds to the CBN once they have been dormant for ten years.  

What you should know

• The CBN earlier disclosed that it may invest funds from Dormant Accounts, unclaimed balances in Nigerian Treasury Bills (NTBs) and other government securities.
• This is according to the newly released “Guidelines on Management of Dormant Accounts, Unclaimed Balances, and Other Financial Assets in Banks and Other Financial Institutions in Nigeria,” by the CBN.
• According to the new guidelines, the CBN will create and manage a dedicated account called the “Unclaimed Balances Trust Fund (UBTF) Pool Account” to warehouse unclaimed balances.
• 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.
• 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.
• Justifying this policy, the Governor of the CBN, Yemi Cardoso said that dormant accounts in Nigeria are more susceptible to fraudsters in Nigeria and the reason for the apex bank’s latest policy is for safe keeping of the funds in dormant accounts.