CBN Moves to Claim Monies in Dormant Accounts in Zenith Bank, First Bank, Others, Extends Dormancy to One Year

• The Central Bank of Nigeria (CBN) is moving to mop-up funds in dormant accounts
• The new guidelines shall include funds in savings, current and domiciliary, and other accounts
• The bank said it shall warehouse the funds in a standard account and invest them in interest-yielding ventures

The Central Bank of Nigeria (CBN) has issued new guidelines to commercial banks on the operations of dormant accounts which have received no deposit or withdrawal for upwards of one year.

The new guideline is contained in the bank's circular to commercial banks issued on Wednesday, April 12, 2023.

CBN to open a common account to warehouse dormant funds

According to the apex bank, it shall open a pool account to warehouse all funds left in dormant savings and current and domiciliary accounts.

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The bank said it would invest the warehoused funds in Treasury Bills and other interest-yielding ventures and return the profits to the owners of the accounts upon reactivation.

Per the circular, the dormant accounts shall be reopened and the funds, including interest rates, returned to the owners upon request within two days.

It directed commercial banks to continue paying interest into dormant accounts and maintain period communications with account owners via emails, text messages, and other necessary mediums.

CBN moves to establish special committee for management of funds in dormant accounts

CBN stated that dormant and unclaimed accounts are targets of fraudsters, hence the move to warehouse the funds in a joint account known as "Unclaimed Balances Trust Fund Pool Account

CBN says:

"The continuous maintenance of such accounts results in the accumulation of huge unclaimed balances at the disposal of the financial institutions for which the depositors may not be adequately compensated. In addition, dormant and unclaimed balances are increasingly susceptible to fraudulent transactions or abuse."

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CBN said it will establish a management committee to oversee funds from the accounts and disburse them accordingly.

It also stated that a bank account should be deemed dormant if it has done any transactions for one year.

It said:

"A bank account shall be classified as dormant if there has been no customer or depositor-initiated transaction in it for one (1) year after the last customer or depositor-initiated transaction.

"The bank shall institute controls consistent with its precautionary policies, including surveillance procedures and 58-level authorization. To make such account active, the customer is to provide satisfactory evidence of account ownership, means of identification, and present place of residence.

"Unclaimed funds shall be categorized as Proceeds of stale local and foreign currency drafts not yet presented for payment by beneficiaries.

Funds received from a correspondent bank without sufficient details as to the rightful beneficiary and/or a recall of funds made to the remitting bank to which the Nigerian bank's account had not been debited; and a judgment debt for which the judgment creditor has not claimed the amount of judgment award."

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The bank said it is empowered by the provisions of Section 72 (11) of the bank and other financial institutions to carry out the guideline.

A report say that about N500 billion have been left by their owners in abandoned bank accounts as of January 2021.

CBN to close millions of bank accounts in Access, UBA, Zenith, First Bank, and others

Legit.ng reported that the Central Bank of Nigeria (CBN) has announced plans to close millions of bank accounts across various financial institutions that are not linked to a Bank Verification Number (BVN).

Blaise Ijebor, the CBN director of the Risk Management Department and Chief Risk Officer, who disclosed the plan at the Prembly Compliance Breakfast Dialogue on Thursday April 6, said the objective is to clean up the sector and reduce the growing incidence of fraud.

The BVN is a unique identifier that captures the biometric data of bank customers and is used to verify their identities and prevent fraudulent activities.

Source: Legit.ng