CBN Slams N2 Million Fine on Erring Banks Over Dormant Accounts
- The Central Bank of Nigeria has imposed a minimum fine of N2 million on commercial banks over dormant accounts
- The bank said in a statement that commercial banks which fail to adhere to its guidelines should face a further daily fine of N200,000
- CBN said in a recent circular that it would mop up funds in dormant accounts and invest them in Treasury Bills
The Central Bank of Nigeria (CBN) has slammed a fine of N2 million on commercial banks that failed to carry out its directives on managing dormant accounts, unclaimed balances, and other financial assets in financial institutions in Nigeria.
The apex bank said bank accounts are classified as dormant if they have remained inactive for at least one year without depositor-initiated transactions for six months after the last customer or depositor-initiated transactions.
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Commercial banks to bear the cost of maintaining dormant accounts
In a recent guideline announced by CBN and signed by its Director of Financial Policy and Regulation Department, Chibuzo Efobi, the bank said it will impose a further daily fine of N200,000 until full compliance.
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The statement said:
“A contravention of any provision of the guidelines shall attract a penalty of not less than N2 million. Failure to comply with CBN’s directive regarding any infraction shall attract a further penalty of N200,000 daily until the directive is complied with or as may be determined by CBN.”
CBN said that the guidelines were rolled out in response to the request of commercial banks and other stakeholders to clarify further the process for managing dormant accounts and inactive accounts by Deposit Money Banks in Nigeria.
CBN stated that commercial banks or financial institutions should bear the cost of maintaining inactive and dormant accounts, including contacting customers and giving periodic reports on dormant accounts in a stipulated manner.
The commercial banks shall also notify account owners in writing via an agreed medium, such as emails, text messages, and letters, as soon as accounts become dormant.
Banks to reactivate dormant accounts upon request
The banks shall also reactivate dormant accounts upon request by customers or authorized representatives, continue to reflect dormant account balances as deposit liabilities, and such balances shall continue to accrue interests where applicable.
According to its electronic factsheet for 2021, the Nigeria Interbank Settlement System (NIBBS) said that the number of bank accounts stood at 191.4 million as of December 2021, while the number of active bank accounts was about 133.5 million owned by 122.3 million active bank customers.
Vanguard reports that in its electronic fact sheet for 2021, the Nigeria Interbank Settlement System, NIBSS, stated that the number of bank accounts stood at 191.4 million as of December 2021, while the number of active bank accounts was 133.5 million owned by 122.3 million active bank customers.
The report indicates that 57.9 million accounts were inactive during that period.
CBN moves to claim monies in dormant accounts in Zenith Bank, First Bank, others, extends dormancy to one year
Legit.ng earlier reported that 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.
According to the apex bank, it shall open a pool account to warehouse all funds left in dormant savings and current and domiciliary accounts.
Source: Legit.ng
