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CBN plans to transfer unclaimed funds and dormant account balances into trust fund

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CBN plans to transfer unclaimed funds and dormant account balances into trust fund

The Central Bank of Nigeria (CBN) has proposed new guidelines for the management of dormant accounts, unclaimed balances, and other financial assets in banks and financial institutions in Nigeria.

The draft proposes that funds in accounts that have been dormant for up to 10 years should be transferred into an Unclaimed Balances Trust Fund pool account domiciled at the CBN. The guidelines were released in response to requests from banks and other stakeholders for the CBN to clarify the procedures for the management of dormant and inactive accounts by banks in the country.

Under the new guidelines, banks and financial institutions are expected to transfer all unclaimed funds into the Unclaimed Balances Trust Fund pool account, which will be invested in government securities such as Treasury Bills. The balances will be returned to the beneficiaries not later than ten days of notice. The eligible accounts and financial assets include current, savings, and term deposits in local currency; domiciliary accounts; deposits towards the purchase of shares and mutual investments; prepaid card accounts and wallets; proceeds of uncleared and unpresented financial instruments belonging to customers or non-customers of FIs; unclaimed salaries and wages, commissions, and bonuses.

The CBN also stated that any bank or financial institution that contravenes any provision of the new guidelines would attract a penalty of not less than N2,000,000. Failure to comply with the CBN’s directive in respect of any infraction would attract a further penalty of N200,000 daily until the directive is complied with or as may be determined by CBN.

The objectives of the guidelines are to identify dormant accounts/unclaimed balances and financial assets with a view to reuniting them with their beneficial owners, hold the funds in trust for the beneficial owners, standardize the management of dormant accounts/unclaimed balances and financial assets, and establish a standard procedure for reclaim of warehoused funds.

The CBN also stated that it would publish an annual list of the owners of the unclaimed balances that had been transferred to the pool account as well as the procedure for reclaim of warehoused funds.

It is worth noting that the Federal Government had revealed plans to borrow unclaimed dividends and funds in dormant account balances of Deposit Money Banks under Part XII of the Companies and Allied Matters Act in the Finance Act 2020. This move elicited reactions from stakeholders and a lawsuit from the Socio-Economic Rights and Accountability Project in 2021.

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