ABUJA, Federal Republic of Nigeria. The Central Bank of Nigeria (CBN) has issued the guidelines on the management of dormant accounts and unclaimed funds.
Through a circular “Guidelines on the management of dormant accounts and other unclaimed funds by banks and other financial institutions in Nigeria” reference number FPR/DIR/CIR/GEN/05/013 of October 7, 2015, which was signed by the Director for Financial Policy and Regulation Department, Kevin Amugo, the CBN said that the guidelines would:
- Curb abuses currently inherent in the operation of inactive and dormant accounts.
- Set the operational standards for Nigerian banks and other financial institution.
- Reinforce the rights of all customers and depositors.
- Standardize the management of dormant accounts in Nigeria.
- Eliminate the possibility of banks converting dormant accounts’ balances to income.
- Strengthen risk management and internal control processes.
The CBN, certainly, has cleared controversies by delineating inactive accounts, dormant accounts and unclaimed funds. The lender of last resort, said:
Inactive Account: “An account shall become inactive if there has been no customer or depositor-initiated transaction for a period of six months after the last customer or depositor initiated transaction.”
Dormant Account: “A bank account shall be classified as dormant if there has been no customer or depositor-initiated transaction in it for a period of one (1) year after the last customer or depositor-initiated transaction.
“Dormant account balances shall continue to be reflected in the books of banks as deposit liabilities until they are eventually withdrawn by the account holders or disposed of, on their instructions.
Unclaimed funds: “Proceeds of stale local and/or foreign currency drafts not yet presented for payment by beneficiaries. Funds received from a correspondent bank without sufficient details as to the rightful beneficiary and/or a recall of funds made to the remitting bank to which the Nigerian bank’s account had not been debited; a judgment debt for which the judgment creditor has not claimed the amount of judgment award.
“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.”
Given the foregoing details that were provided in the guidelines issued by the CBN, all the banks and other financial institutions in Nigeria are now forbidden to convert unclaimed funds to income or profit.
