The Central Bank of Nigeria (CBN) recently released an exposure draft on ‘the Management of Dormant Accounts, Unclaimed Balances and other financial assets in Banks and Other Financial Institutions in Nigeria’.
Unclaimed bank accounts refers to the funds in an account that has been inactive for 10 years. This may occur when a customer does not deposit or withdraw money from a bank account.
Eligible accounts according to the CBN are dormant accounts balances that have remained with the Financial Institutions (FIs) for a period of 10 years and beyond.
According to a top banker, some of the unclaimed balances belong to dead people who could not disclose their financial information to their next of kin before they died.
The beneficial owners can access the list of unclaimed balances transferred to CBN on the websites of FIs/CBN and/or newspaper publications.
The beneficial owner shall visit any branch or office of the FIs and complete an ‘Asset Reclaim Form’.
The FIs shall verify the claim and initiate the request to CBN within 10 working days; and the CBN shall refund unclaimed amount to the beneficiaries through their FIs within 10 working days from the date of the receipt of the FI’s request.
In 2022, the House of Representatives commenced investigation into the over N1.3 trillion unclaimed funds in commercial banks.
The CBN, in the exposure draft directed banks to transfer balances that have remained in the dormant account register for up to 10 years to the Unclaimed Balances Trust Fund (UBTF) pool account.
Chibuzo Efobi, director, financial policy and regulation department of the CBN, said this in a circular to all banks and other financial institutions (OFIs), on ‘the Management of Dormant Accounts, Unclaimed Balances and other financial assets in Banks and Other Financial Institutions in Nigeria’, released recently.
She said this was in request from banks and other stakeholders, for the CBN to further clarify the procedures for management of dormant and inactive accounts by banks in Nigeria.
The exposure draft released along with the circular dated April 6, 2023 gave three weeks time frame for stakeholders to make input through the director, financial policy and regulation department of the CBN.
The CBN on October 7, 2015, issued Guidelines on the Management of Dormant Accounts and Other Unclaimed Balances by Banks and Other Financial Institutions in Nigeria, to curb abuses in the operation of dormant and inactive accounts and set operational standards.
To strengthen the oversight functions of CBN on the management of dormant and unclaimed balances, the Banks and Other Financial Institutions Act, 2020 (BOFIA) made explicit provisions on unclaimed funds or abandoned property in FIs under the regulatory purview of the CBN.
“This Guidelines is, therefore, issued as an exposure draft pursuant to the powers conferred on the CBN Governor by the CBN Act 2007 and BOFIA 2020 and supersedes the 2015 Guidelines on the Management of Dormant Accounts and Other Unclaimed Balances by Banks and Other Financial Institutions in Nigeria,” the CBN said.
The CBN said it shall open and maintain a trust fund called ‘Unclaimed Balances Trust Fund Pool Account (UBTF).
Nigeria’s banking and finance sector regulator would maintain records of the beneficiaries of the unclaimed balances warehoused in the UBTF Pool Account.
The CBN said it would invest the funds in Nigerian treasury bills (NTBs) and other securities as may be approved by the ‘Unclaimed Balances Management Committee’; and refund the unclaimed funds to the beneficiaries not later than 10 working days from the date of receipt of the request.
Where it is imperative to extend the timeline, the CBN said a notice of extension shall be communicated to the requesting financial institution (FI) stating reasons for the extension.