The Central Bank of Nigeria (CBN) has clarified that only accounts inactive for over 10 years will be classified as dormant and used for investment purposes. Additionally, a dedicated office will be established to manage dormant accounts and unclaimed balances.
This information was disclosed in the CBN’s document titled “FAQs – Guidelines on Dormant Account and Unclaimed Balances – July 25, 2024,” available 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. It aims to operationalize Section 72 of the Banks and Other Financial Institutions Act, 2020, and standardize the management of dormant accounts and unclaimed balances.
The CBN also mentioned that funds from dormant accounts and unclaimed balances might be invested in Nigerian Treasury Bills and other government securities. The apex bank will manage these funds in trust, ensuring that the principal and any accrued interest are refunded to beneficiaries within 10 working days of receiving a reclaim request 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 CBN also stated that financial institutions are required to notify customers immediately when their accounts become inactive or dormant and continue to send reminders every quarter.
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.”
According to the new guidelines, the CBN will establish and manage a dedicated account known as the “Unclaimed Balances Trust Fund Pool Account” to store unclaimed balances.
The guidelines specify that accounts eligible 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.
To reactivate a dormant account, account owners must complete a reactivation form at their respective financial institutions, providing evidence of ownership and valid identification.
However, certain accounts are exempt from being classified as dormant, such as those subject to litigation, judgment debts under active court cases, accounts under regulatory investigation, and encumbered accounts like collaterals and liens.
Explaining the rationale behind this policy, CBN Governor Yemi Cardoso noted that dormant accounts in Nigeria are more vulnerable to fraud. Therefore, the apex bank’s latest policy aims to ensure the safe keeping of funds in dormant accounts.
