The Central Bank of Nigeria has proposed new guidelines for the management of dormant accounts, unclaimed balances, and other financial assets in banks and financial institutions in Nigeria.
As per the recently released exposure draft, the proposal suggests that funds in accounts that have been dormant for up to 10 years should be transferred into a trust fund account, specifically an “Unclaimed Balances Trust Fund Pool Account” domiciled at the CBN.
The draft guidelines outline that eligible accounts and financial assets subject to this proposal include current, savings, and term deposits in local currency, domiciliary accounts, deposits for the purchase of shares and mutual investments, prepaid card accounts and wallets, proceeds of uncleared and unpresented financial instruments, unclaimed salaries and wages, commissions, and bonuses, among others.
CBN further stated that the unclaimed funds in the trust fund account would be invested in government securities such as Treasury Bills and would be returned to the rightful beneficiaries within ten days of notice.
The guidelines aim to identify dormant accounts and unclaimed balances, hold the funds in trust for the beneficial owners, standardize the management of such accounts and balances, and establish a standard procedure for the reclamation of warehoused funds.
To ensure compliance, the CBN has imposed penalties for any bank or financial institution that contravenes the guidelines, with a minimum penalty of N2,000,000. Failure to comply with the CBN’s directive may attract further penalties of N200,000 daily until compliance is achieved, or as determined by the CBN.
It is worth noting that the Finance Act 2020 also revealed plans by the Federal Government of Nigeria to borrow unclaimed dividends and funds from dormant account balances of Deposit Money Banks, as stated in Part XII of the Companies and Allied Matters Act in the Finance Act.