Nigerian Central Bank to Collect Unclaimed Funds and Dormant Account Balances

The Central Bank of Nigeria (CBN) has introduced new Guidelines on the Management of Dormant Accounts that will enable it to collect all unclaimed balances and dormant account balances held in banks. The balances will be deposited in a designated account called the “Unclaimed Balances Trust Fund Pool Account” and invested in government securities. The beneficiaries of these balances will be returned the funds not later than ten days of notice. The new guidelines, which took effect immediately, replace the October 7, 2015 Guidelines on the Management of Dormant Accounts and Other Unclaimed Balances by Banks and Other Financial Institutions in Nigeria.

According to the CBN, eligible accounts include dormant accounts that have remained with financial institutions (FIs) for ten years and beyond. These accounts are Current, Savings, and Term deposits in local currency, Domiciliary accounts, Deposits towards the purchase of shares and Mutual Investments, Prepaid card accounts and wallets, Proceeds of uncleared and unpresented financial instruments belonging to customers or non-customers of FIs, Unclaimed salaries and wages, commissions, and bonuses, and Proceeds of stale local and/or foreign currency drafts not presented for payment by beneficiaries.

The CBN has also mandated financial institutions to establish effective controls to ensure surveillance and second-level authorization on reactivation of dormant accounts. They are required to maintain a register of dormant account balances, transfer balances that have remained in the dormant account register for up to ten years to the “UBTF Pool Account,” and require customers seeking to reactivate dormant accounts to provide evidence of account ownership, valid means of identification, evidence of the present place of residence, and affidavit on the accuracy of the information to reactivate the account.

The Central Bank has warned that banks or financial institutions that contravene any provision of the new guidelines will pay a fine of not less than N2,000,000 as a penalty. Failure to comply with CBN’s directive in respect of any infraction will attract a further penalty of N200,000 daily until the directive is complied with or as may be determined by CBN.