The Central Bank of Nigeria (CBN), has mandated Deposit Money Banks (DMBs) that have, in the last 5 years recorded credit balances in dormant accounts as income to reclassify such accounts to deposits not later than six 6 months from October 7,2015.
However, such an account shall be recognized as inactive after the first six months of non-depositor or customer originated transaction in it.
The apex bank in a circular to all banks and other financial institutions available in its website, described dormant accounts as that which “there has been no customer or depositor-initiated transaction in it for a period of one (1) year after the last customer or depositor-initiated transaction.”
When the account becomes dormant, CBN stated, the bank shall institute controls consistent with its precautionary policies, including surveilance procedures and second level authorization.
Banks according to the CBN, shall retain the records of all dormant accounts despite the number of years that the owners did not carry out any transaction on the accounts, “and shall reactivate such accounts upon request by the bona fide account holder or his/her legitimate representatives.”
It said that in a situation where any unclaimed funds remain outstanding in the books of the bank beyond six months, the bank shall pool all such funds into a suspense account.
“The bank shall warehouse the funds until the beneficiary shows up or the corresponding bank debits its account,” the circular signed by Mr. Kevin Amugo, the CBN’s Director, Financial Policy and Regulation Department
read in part.
Contained in a set of new guidelines for the treatment and management of dormant accounts by commercial banks, CBN noted that the aims of the new policy is to ensure that dormant account funds are identified and routed through appropriate institutions to make them more productive to the economy and eliminate the possibility of banks converting dormant account balances to income.
The bank stated that the absence of clear guidelines for the management of dormant accounts had resulted in the disproportionate treatment of such account balances by deposit-taking financial institutions.
The apex bank stated further that, it is in view of the above and the imperative to promote transparency in the financial system that the it hereby issues these guidelines.
