Fakoyejo OlalekanThe Central Bank of Nigeria (CBN) has informed commercial banks that it will use the money in dormant accounts for investment purposes.
CBN said it will favour the financial regulator and the account holders, as the funds in the dormant accounts will be invested in Treasury Bills and other interest-yielding ventures, with profit from the investment disbursed to the account holders.
Join our WhatsApp ChannelThere are over N500 billion fund in millions of dormant accounts in Nigerian banks.
As of 2021, there are about 57.9 million inactive bank accounts according to data from the Nigeria Inter-Bank Settlement System Plc (NIBSS), considering out of the total 133.5 million opened accounts, 191.4 million are active.
The CBN described dormant accounts as accounts without transaction in a year, the financial regulator wrote in a circular to commercial banks on Wednesday.
According to the CBN, the provisions of Section 72 (11) of the CBN Act empower the apex bank to utilise the funds in the dormant accounts.
However, the bank regulator said the owners of the dormant accounts will be refunded their money two days upon request and their accounts will also receive profits on the investment made with their capital.
CBN revealed that the funds in the total dormant accounts will be deposited in a joint account known as “Unclaimed Balances Trust Fund Pool Account”.
The apex bank said using the dormant funds is more favourable to the money locked up in the dormant accounts which are often targeted by hackers. The decision will affect domiciliary and local accounts.
“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,” CBN said.
The circular also stated: “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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