Central Bank of Nigeria Allows Claims on Unclaimed Balances in Dormant Accounts

 The Central Bank of Nigeria (CBN) has announced a new policy enabling next-of-kin, legal representatives, and beneficial owners to claim unclaimed balances from dormant accounts. This development comes as part of the CBN’s efforts to manage and recover funds held in inactive accounts.

According to a report released over the weekend, eligible parties can now submit applications to financial institutions to claim unclaimed funds. The applications must include legal proof of entitlement, and for corporate accounts, details of directors and authorized signatories are required.

Once an application is approved, the CBN will transfer the unclaimed funds to the Unclaimed Balances Trust Fund (UBTF) Pool Account, where they will be invested in treasury bills and other securities. The principal amount and any accrued interest will be refunded to the beneficiaries within 10 working days of a successful reclaim request.

To initiate a claim, account owners must visit their financial institution to complete a reclaim form and provide evidence of ownership, a sworn affidavit, and a valid identification. Financial institutions will then verify the claim and forward it to the CBN within 10 days. Upon receiving the request, the CBN will process and refund the money within an additional 10 days.

In cases where a financial institution's license is revoked, the Nigeria Deposit Insurance Corporation (NDIC) will take over the management of dormant accounts. The new policy also covers unclaimed balances in dormant domiciliary accounts, although active domiciliary accounts are not affected.

The CBN defines inactive accounts as those with no customer-initiated transactions for six to 12 months, while dormant accounts are those that have remained inactive for one year or more. Unclaimed balances refer to those accounts that have been dormant for at least 10 years.

Eligible accounts for claims include current, savings, term deposits, domiciliary accounts, deposits for shares, prepaid card accounts, and government-owned accounts. However, accounts under litigation, investigation, or encumbered are excluded from this policy.

In addition, the CBN has mandated banks to notify account owners when their accounts become inactive or dormant and to continue these notifications on a quarterly basis. This policy follows a recent directive requiring financial institutions to transfer all unclaimed funds to an account managed by the CBN.