Nigeria’s Central Bank Mandates Transfer of Dormant Funds to Apex Bank

 

The Central Bank of Nigeria (CBN) has directed banks and financial institutions to transfer unclaimed balances and funds from dormant accounts to a central CBN account. This move aims to streamline the management of inactive funds and ensure they are accessible to their rightful owners.

The CBN’s new regulations, detailed in a document released on Friday titled "Guidelines on Management of Dormant Accounts, Unclaimed Balances, and Other Financial Assets in Banks and Other Financial Institutions in Nigeria," update guidelines from October 2015. These rules are effective immediately and replace the previous guidelines.

A dormant account is defined as one inactive for at least one year. The updated guidelines target accounts with balances dormant for 10 years or more. The CBN will manage these funds through the newly established 'Unclaimed Balances Trust Fund (UBTF) Pool Account,' overseen by a management committee. This process involves collaboration with the Nigeria Deposit Insurance Corporation (NDIC) and other financial institutions.

Account owners or beneficiaries must complete a reactivation form in person to reclaim their funds. Required documentation includes proof of account ownership, valid identification, evidence of current residence, and an affidavit verifying the information provided.

The CBN will monitor compliance through off-site and on-site examinations of financial institutions. The new regulations, operationalizing Section 72 of the Banks and Other Financial Institutions Act (BOFIA) 2020, aim to standardize and improve the handling of dormant accounts and unclaimed assets.

Key points from the guidelines include:

• Transfer of funds to the CBN must be managed according to BOFIA 2020.
• Financial institutions must standardize the management of dormant accounts and unclaimed balances.
• Reactivation of accounts should be completed within three working days without fees.
• Claims for funds must be verified and processed within ten working days.

The guidelines emphasize a commitment to ensuring that dormant funds are securely held and properly returned to their owners, enhancing the efficiency of financial asset management in Nigeria.