The Central Bank of Nigeria (CBN) has issued a directive requiring all banks and financial institutions to transfer funds from dormant accounts and unclaimed balances to the apex bank's centralized account. This decision follows a review of the guidelines on managing dormant accounts, which was last updated in October 2015.
The revised guidelines, effective immediately, operationalize Section 72 of the Banks and Other Financial Institutions Act (BOFIA) 2020. They standardize the management of dormant accounts and unclaimed balances, outlining procedures for their administration by financial institutions. The CBN emphasized that the directive is a result of consultations with relevant stakeholders, ensuring that their feedback was incorporated into the new guidelines.
In a circular issued on 19th July 2024 by Mr. John Onoja, the Acting Director of Financial Policy and Regulations at the CBN, it was indicated that accounts which have remained dormant for 10 years or more will be affected.
The circular stated, “The provisions of this guideline shall apply to all financial institutions under the purview of the Central Bank of Nigeria.” The CBN emphasized that the objective of these guidelines is to identify dormant accounts and unclaimed balances with the aim of reuniting them with their beneficial owners, holding the funds in trust for the owners, standardizing the management of dormant accounts and unclaimed balances, and establishing a standard procedure for reclaiming warehoused funds.
Eligible accounts are defined as dormant account balances that have remained with financial institutions for a period of ten years or more. This includes current, savings, and term deposits in local currency; domiciliary accounts; deposits towards the purchase of shares and mutual investments; prepaid card accounts and wallets; government-owned accounts; proceeds of uncleared and unpresented financial instruments; unclaimed salaries, wages, commissions, and bonuses; proceeds of stale local or foreign currency drafts not presented for payment; funds received from correspondent banks without sufficient beneficiary details; and judgment debts that have not been claimed by the judgment creditor.
Certain dormant accounts and financial assets are exempted from this directive, including accounts subject to litigation, accounts under investigation by regulatory or law enforcement agencies, and encumbered accounts such as those with collateral and liens.
The CBN reassured the public that this initiative aligns with global best practices and aims to promote the stability and integrity of the Nigerian financial system. The apex bank encourages account holders to stay informed about the status of their accounts and engage with their banks regularly to avoid any inconvenience.
This directive is effective immediately, and banks are required to comply fully within the stipulated timeframe. The CBN will monitor the implementation process to ensure adherence to the guidelines and address any arising issues.
CBN will also communicate the modalities for the transfer of these funds and the revised templates for quarterly reporting to the Banking Supervision Department and the Other Financial Institutions Supervision Department in due course. This move aims to enhance the management of unclaimed financial assets and improve the overall efficiency of banking operations in Nigeria.