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Nigerian Central Bank Moves To Grab Unclaimed Funds In Banks, Dormant Account Balances

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

This information was provided by CBN in its updated April 2023 Guidelines on the Management of Dormant Accounts, which The Whistler was able to access.

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

The October 7, 2015 Guidelines on the Management of Dormant Accounts and Other Unclaimed Balances by Banks and Other Financial Institutions in Nigeria are repealed by the new regulations, which come into force right away.

The draft guidelines say, “The Central Bank of Nigeria shall open and maintain an account earmarked for the purpose of warehousing unclaimed balances in eligible accounts. The account shall be called “Unclaimed Balances Trust Fund Pool Account.”

‘The eligible accounts CBN said are dormant accounts balances that have remained with the FIs for a period of 10 years and beyond.

“The eligible accounts and financial assets are: Current, Savings and Term deposits in local currency; Domiciliary accounts; Deposits towards the purchase of shares and Mutual Investments; Prepaid card accounts and wallets; Proceeds of uncleared and unpresented financial instruments belonging to customers or non-customers of FIs; Unclaimed salaries and wages, commissions, and bonuses.

Others are: “Proceeds of stale local and/or foreign currency drafts not 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.

“Financial Institutions shall treat accounts and financial assets that have become dormant as follows:

“Formulate policies for the recognition and management of dormant accounts and financial assets that are consistent with this guideline and other extant regulations; ii. Establish effective controls to ensure surveillance and second-level authorization on reactivation of dormant accounts, among other measures;

“Maintain a register of dormant accounts balances; Transfer balances that have remained in the dormant account register for up to ten years to the ‘UBTF Pool Account; and Require customers seeking to reactivate dormant accounts to provide evidence of account ownership, valid means of identification, evidence of the present place of residence, and affidavit on the accuracy of the information to reactivate the account.”

The apex bank will “open and maintain the ‘Unclaimed Balances Trust Fund Pool Account'” when it receives the unclaimed sums, according to CBN. Keep track of the recipients of the unclaimed money stored in the UBTF Pool Account; the money should be invested in Nigerian Treasury Bills (NTBs) and other securities that the “Unclaimed Balances Management Committee” may authorize;

“Within ten (10) business days of receiving the request, refund the unclaimed monies to the beneficiaries. When an extension of the deadline is necessary, a notification of extension with justifications must be sent to the requesting FI.

The Central Bank said any bank or financial institution that contravenes any provision of the new guidelines would pay a fine of not less than N2,000,000 as a penalty.

It added that failure to comply with CBN’s directive in respect of any infraction will attract a further penalty of N200,000 daily until the directive is complied with or as may be determined by CBN.

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