CBN updates information on unclaimed bank customers’ funds

The Central Bank of Nigeria, or CBN, has announced that it will transfer all inactive account balances and unclaimed funds from banks into a special account that it has set up.

The funds will be invested in government securities and refunded to the recipients with no later than 10 days’ notice, according to the apex bank.

This information was provided in the Guidelines on the Management of Dormant Accounts Exposure Draft, which was created in April 2023.

Guidelines on the Handling of Dormant Accounts and Other Unclaimed Balances by Banks and Other Financial Institutions in Nigeria, which were published on October 7, 2015, are repealed by the document.

“The Central Bank of Nigeria must create and maintain an account designated for the purpose of storing unclaimed funds in eligible accounts,” the CBN stated. The name of the account is “Unclaimed Balances Trust Fund Pool Account.”

According to the apex bank, qualifying accounts are those with balances that have been dormant for at least ten years and longer and have stayed with the FIs.

The following financial assets and accounts are eligible: 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 Cleared and Unpresented Financial Instruments Belonging to Customers or Non-Customers of FIs; Unclaimed Wages, Commissions, and Bonuses.

Among the others are: Proceeds from stale local and/or foreign currency draughts that beneficiaries have not presented for payment; funds received from a correspondent bank without sufficient information regarding the rightful beneficiary; and/or a recall of funds made to the remitting bank that have not yet been deducted from a Nigerian bank’s account.

Financial Institutions must handle accounts and financial assets that have been inactive as follows, according the CBN:

“i. Create policies for the identification and management of dormant accounts and financial assets that are in accordance with this recommendation and other laws currently in effect; ii. Establish efficient controls to ensure surveillance and second-level approval on dormant account reactivation, among other measures;

“iv. Transfer balances that have remained in the dormant account register for up to ten years to the UBTF Pool Account; and v. Require customers seeking to reactivate dormant accounts to provide evidence of account ownership, valid means of identification, proof of the current place of residence, and an affidavit on the accuracy of the information in order to reactivate the account.

According to CBN, the apex bank will do the following when it receives unclaimed balances: “i. Open and maintain the ‘Unclaimed Balances Trust Fund Pool Account’; ii. Maintain records of the beneficiaries of the unclaimed balances warehoused in the UBTF Pool Account; iii. Invest the funds in Nigerian treasury bills (NTBs) and other securities as may be approved by the ‘Unclaimed Balances Management Committee’;

“iv. Return unclaimed money to the recipients not later than ten (10) business days after the request is received. v. When it is necessary to extend the deadline, a notification of extension must be sent to the FI making the request and provide an explanation of the extension.

The Central Bank stated that any bank or financial institution that violates the new standards would be subject to a fine of at least N2,000,000.

It further stated that failing to follow CBN’s order in regards to any infringement would result in further fines of N200,000 daily until the directive is followed or as may be decided by CBN.

In the Whistler