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The Central Bank of Nigeria (CBN) has announced that only accounts with inactivity exceeding 10 years will be classified as dormant and designated for investment purposes. This update comes as part of the CBN’s latest guidelines aimed at managing dormant accounts and unclaimed balances.
In a document titled “FAQs – Guidelines on Dormant Accounts and Unclaimed Balances – July 25, 2024,” posted on its website, the CBN outlined new procedures for handling such accounts. The guidelines, which are based on Section 72 of the Banks and Other Financial Institutions Act, 2020, are designed to standardize the management of dormant accounts and unclaimed funds.
The CBN plans to invest funds from these dormant accounts in Nigerian Treasury Bills and other government securities. The bank will manage these investments in trust and ensure that the principal amount along with any accrued interest is returned to beneficiaries within 10 working days upon receiving a reclaim request.
According to the CBN, dormant accounts are those inactive for more than 10 years. Eligible accounts include current and savings accounts, term deposits, domiciliary accounts, prepaid card accounts, wallets, deposits for shares and mutual investments, and government-owned accounts.
Financial institutions are required to notify customers immediately when their accounts become inactive and subsequently on a quarterly basis. The CBN will establish a dedicated office to oversee the management of dormant accounts and unclaimed balances. This office, supervised by a management committee, will also handle a dedicated account named the “Unclaimed Balances Trust Fund Pool Account.”
The guidelines specify that interest rates on these accounts will be determined by the CBN periodically. For non-interest bearing accounts, the CBN will decide the profit or loss on unclaimed balances. Reactivating a dormant account will require account owners to complete a reactivation form at their financial institutions, providing proof of ownership and valid identification.
Certain accounts will be exempt from being classified as dormant, including those involved in litigation, under active court cases, under regulatory investigation, or encumbered by collaterals and liens.
CBN Governor Yemi Cardoso emphasized that the new policy is intended to protect funds in dormant accounts from potential fraud and ensure their secure management.
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