Nigeria- The Central Bank of Nigeria in a circular signed by its
Director, Financial Policy and Regulation Department, Mr. Kevin Amugo,
on Tuesday has introduced new guidelines for the treatment and
management of dormant account balances by deposit-taking financial
institutions. Punch reports.
“A dormant account shall be a bank account that has no customer or
depositor originated transaction within a specified period of six years
after the last customer or depositor initiated a transaction. However,
such an account shall be recognised as inactive after the first six
months of non-depositor or customer originated transaction in it.”
“Accounts shall retain their interest earning status during the period
of dormancy in the bank. Deposit-taking financial institutions shall
continue to monitor accounts that show tendencies of inactivity and
where necessary, initiate actions for their activation or protection
from wrong usage.
“Once dormant accounts exceed a six-year period, they shall be reported
to the CBN along with efforts made by the obligor bank to locate the
owners or their personal representatives.”
The CBN stated that three months to the end of the six years, both the
account holder and the next-of-kin would be notified, adding that
revalidation of inactive/dormant accounts would not attract any charge
to the account holder as the banks would have made ample use of the idle
funds.
It said, “Dormant account balances shall continue to be reflected in the
books of banks as deposit liabilities until they are eventually
withdrawn by the account holders or disposed of on their instructions.
Dormant account balances shall, therefore, be regarded as deposits and
shall be covered by deposit insurance.
“In the case of government-owned inactive/dormant accounts, banks shall
notify the relevant government agency of their existence, with periodic
returns of such notification sent to Banking Supervision Department.
Banks are also required to turn over the funds to the concerned treasury
after six years of inactivity.”
The bank said account opening forms would include the provision of
next-of-kin, who would be contacted at the point of declaring the
accounts dormant.
“The provisions of the guidelines shall take immediate effect. Sanctions
for contravention of the provisions of the guidelines shall be imposed
under Section 60 of the BOFIA (1991) as amended,” the CBN said
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