Dormant accounts soar on anti-graft war, BVN

Nigerian banks are making in-roads into free monies following what now seems to be ‘insider’ related instructions aimed at alerting relevant government agencies of transactions worth up to N50million done at once, BusinessDay has gathered.

Some banks bigwig customers have deliberately ignored linking their Bank Verification Numbers (BVNs) to their accounts, in fear of the anti-graft agency tracing Nigeria’s stolen wealth to their accounts.

Also, they fear the increasing surveillance on taxable corporates/individuals by the Federal Government revenue agency, which has raised its ante on closing the widening margin of the untaxed.

The unflinching anti-graft war declared on corrupt Nigerians by President Muhammadu Buhari, along with the disclosure of banks customers’ identity, using BVN may have been responsible for the increase in number of dormant accounts across the nation. Dormant accounts now amount to 26 million.

Most banks have weighed the implication and are even comfortable with the development. This is because most of these idle monies were fixed over the years with accrued interests running in millions payable with standing instructions to the customers’ accounts provided.

“Without BVN, it is now difficult to access the funds. Most of the customers are not coming and not bothered. The implication is that interest accruing to these accounts could be stopped at the instance of the bank it is domiciled, if there is no BVN linked to the account”, a top-banking executive told BusinessDay.

“While some banks struggled to attract deposits, others coasted over years because they had cool monies in their kitty, as if the customers forgot it. For instance, I remember in those days in Jos, while we were struggling to meet our targets, there was an account with up to N10billion, left over the years without any withdrawals,” he said.     

BusinessDay findings show that majority of the account holders have neither registered for their BVN, which the Central Bank of Nigeria (CBN) has made a requisite for accessing any bank account in the country, nor made transactions on the accounts in the past six months.

A bank account is classified as dormant, if there is no customer or depositor-initiated transaction in it for a period of one year after the last depositor-initiated transaction. And it is declared inactive after six months of no customer transaction.

A top management staff of one of the commercial banks in the country, who does not want his name to be mentioned because he is not permitted to speak, told our correspondent that some of the dormant accounts have huge cash portfolio.

According to the source, “most of the account holders have not showed up to register for their BVN, probably for the fear of Economic and Financial Crimes Commission (EFCC) because some of the accounts have huge deposits in them.

“Though, some of them may be out of the country. But to accommodate Nigerians in diaspora, NIBSS, in partnership with OIS (Online Integrated Solution) introduced a simple process for Nigeria bank customers in diaspora to register and link their BVN online to their Nigeria bank accounts”, he added.

Only recently, the Nigerian Inter Bank Settlement Scheme (NIBSS) data revealed that about 26 million accounts, representing over 30 percent of total customer accounts in banks’ books are dormant. According to the data, the total various bank accounts in Nigeria in 2015 were 85 million, of which 59 million of the total accounts were active.

The NIBSS report also shows that Nigerians opened 10.5 million bank accounts in the year under review. The data further showed that savings accounts, which stood at 58.4 million, accounting for about 68.7 percent of the total bank accounts, remained the prevalent deposit product, while current accounts recording 23.3 million accounted for 27.4 percent, the total bank accounts.

However, fixed deposit and other related accounts recorded 3.3 million, representing 3.9 percent of the total number of bank accounts. The report showed that the number of fixed deposit and other accounts grew faster by 31 percent last year, than both savings and current accounts, which grew by 11.5 percent and 11.6 percent respectively.

The rapid rate at which the fixed deposit and other accounts grew, shows that a lot of accounts had been abandoned for reasons best known to the holders.

But drawing inference from our sources, considering the alleged huge amount in some of the dormant accounts at a time, when the president and the anti-graft agencies are out to probe anyone found with unexplainable money, indications are that some of the accounts have been abandoned for fear of prosecution.

According to the CBN’s dormant accounts guidelines, “Where any unclaimed funds remain outstanding in the books of the bank beyond six (6) months, the bank shall pool all such funds into a suspense account. The bank shall warehouse the funds until the beneficiary shows up or the corresponding bank debits its account.”

The question is: what happens to those monies in the said dormant accounts, if the owners eventually refuse to show up for claims due to the fear of EFCC or for reactivation of the accounts?

When the monies are moved into the suspense account domiciled in the various banks, do they remain unused when the nation is in dire need of money? Or would the banks use them for business transactions? These and many more are questions seeking answers.

Iheanyi Nwachukwu & Chigozie Egwuatu