Nigerian banks asked to send unclaimed balances and funds in dormant accounts to CBN

Nigerian banks and other financial institutions have been directed to send all dormant accounts, unclaimed balances, and other financial assets to the Central Bank of Nigeria (CBN).

The apex bank made this known in a circular released on Friday and signed by its acting Director of the Financial Policy and Banking Regulation Department, John Onojah.

According to the CBN, all dormant accounts and unclaimed balances with banks for at least 10 years will be warehoused in a dedicated account known as the Unclaimed Balances Trust Fund Pool Account.

The apex bank added that the funds from dormant accounts and unclaimed balances may be invested in Nigerian Treasury Bills and other government securities.

The CBN, however, said the new guidelines, which is a review of the guidelines issued in October 2015, exempted dormant accounts, and unclaimed balances under litigation and investigation,.

The guideline reads, “CBN shall treat unclaimed balances (dormant accounts and financial assets) as follows:

“Open and maintain the ‘UBTF Pool Account’; maintain records of the beneficiaries of the unclaimed balances warehoused in the UBTF Pool Account.

“Invest the funds in Nigerian treasury bills (NTBs) and other securities as may be approved by the ‘Unclaimed Balances Management Committee.

“Refund the principal and interest (if any) on the invested funds to the beneficiaries not later than 10 working days from the date of receipt of the request and where it is imperative to extend the timeline, a notice of extension shall be communicated to the requesting FI stating reasons for the extension.”

REUNITING FUNDS FOR BENEFICIAL OWNERS

In the document, CBN said 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,” the apex bank said.

“Establish a standard procedure for reclaiming warehoused items.”

10 YEARS DORMANCY

According to the financial regulator, eligible accounts are dormant account balances that have remained with the institution for 10 years and beyond.

“Eligible dormant accounts, unclaimed balances and other financial assets shall include: Current, Savings and term deposits in local currency,” CBN added.

“Domiciliary accounts; deposits towards the purchase of shares and mutual investments; Prepaid card accounts and wallets; government-owned accounts;

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“Proceeds of uncleared and unpresented financial instruments belonging to customers or non-customers of FIs.”

Furthermore, the CBN said it will open and maintain an account earmarked for the purpose of warehousing unclaimed balances in eligible accounts.

The account shall be called the ‘Unclaimed Balances Trust Fund (UBTF) Pool Account’.

In addition, the CBN shall establish a management committee to oversee the operation of the UBTF pool account, monitor and enforce compliance with these guidelines, and manage the funds in line with the provisions of BOFIA 2020.

Other stakeholders of the unclaimed accounts are the Nigeria Deposit Insurance Corporation (NDIC) and financial institutions.

Reaction, Unclared Functions

To reactivate a dormant account, CBN said the account owner or beneficial owner must complete a reactivation form in person.

“Obtain from the account owner evidence of ownership of the dormant account with valid means of identification, evidence of present place of residence, and affidavit on the accuracy of the information to reactivate the dormant account,” the apex bank said.

“Verify the information provided on the reactivation form; do not charge any fee for reactivation of dormant account.

“Reactivate the dormant account with the approval of two (2) authorized officers, with one being at least the branch operations manager.

“Reactivate dormant accounts within a maximum of three (3) working days of receipt of a written application to that effect.

“Notify the account owner, free of charge, upon reactivation of the account.”

Also, to access the list of unclaimed balances transferred to CBN on the websites, the account owner/beneficial owner shall provide evidence of account ownership, valid means of identification, evidence of the present place of residence, and an affidavit on the accuracy of the information to reactivate the account.

“The profit and loss ratio on the unclaimed balances for non-interest banks shall be determined by the CBN from time to time;

“The FIs shall verify the claim and initiate the request with supporting documents to CBN within ten (10) working days;

“Application for reclaim shall be to the director, banking services department, CBN;

“CBN shall refund unclaimed balance to the account owners/beneficial owners through their FIs within ten (10) working days from the date of receipt of the FI’s request.

“Beneficial owners shall not make partial claims, and the right of beneficial owners to reclaim shall be indefinite.”

CBN said monitoring and enforcement of banks and financial institutions will be done through off-site surveillance as well as on-site routine and target examinations.