The Central Bank of Nigeria (CBN) has directed banks and other financial institutions (OFIs) to transfer balances that have been dormant for up to 10 years to the Unclaimed Balances Trust Fund (UBTF) pool account. Chibuzo Efobi, director of the financial policy and regulation department of the CBN, issued a circular to all banks and OFIs clarifying the procedures for managing dormant and inactive accounts. The CBN’s exposure draft, released with the circular on April 6, 2023, gave stakeholders three weeks to make input.
To combat abuses in the operation of dormant and inactive accounts and set operational standards, the CBN issued Guidelines on the Management of Dormant Accounts and Other Unclaimed Balances by Banks and Other Financial Institutions in Nigeria on October 7, 2015. The Banks and Other Financial Institutions Act, 2020 (BOFIA) also made provisions for unclaimed funds or abandoned property under the regulatory purview of the CBN to strengthen oversight functions.
The new guidelines, issued as an exposure draft pursuant to the CBN Act 2007 and BOFIA 2020, supersede the 2015 guidelines. The CBN aims to ensure that unclaimed funds are pooled together and used for social development projects.
The circular stated that all dormant accounts in Nigeria would be required to have a fixed minimum balance of N5,000 and that banks and OFIs were mandated to notify account holders of impending dormancy after six months of inactivity. If account holders do not carry out transactions on their accounts after the notification, banks and OFIs must transfer the account balances to the UBTF pool account.
The guidelines also stipulate that the trust fund pool account will be managed by the CBN, and that the interest accruing on the funds will be utilised to support social development projects in Nigeria.
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