CBN Designates 10-Year Inactive Accounts as Dormant

The Central Bank of Nigeria has clarified that only accounts inactive for over 10 years will be classified as dormant and used for investment purposes. A dedicated office will be created to manage these dormant accounts and unclaimed balances.

This information was disclosed in the CBN’s recently issued document titled, “FAQs – Guidelines on Dormant Account and Unclaimed Balances – July 25, 2024,” posted on its website.

The Guidelines on the Management of Dormant Accounts, Unclaimed Balances, and Other Financial Assets in Banks and Other Financial Institutions in Nigeria aim to operationalize Section 72 of the Banks and Other Financial Institutions Act, 2020, and standardize the management of dormant accounts and unclaimed balances.

The CBN had previously mentioned that funds from dormant accounts and unclaimed balances might be invested in Nigerian Treasury Bills and other government securities.

According to the apex bank, these funds will be managed in trust, with the principal and any accrued interest refunded to beneficiaries within 10 working days of receiving a reclaim request from the financial institution.

“Dormant accounts are accounts that have been inactive for more than 10 years. Eligible accounts are dormant account balances that have remained with the FIs for 10 years or more,” the CBN stated.

Eligible accounts include current, savings, term deposits in local currency, domiciliary accounts, deposits for shares and mutual investments, prepaid card accounts and wallets, and government-owned accounts, among others specified by the CBN.

Financial institutions are required to notify customers immediately and quarterly when their accounts become inactive or dormant.

The FAQ document stated, “The CBN shall establish a dedicated office for this purpose. The office will be supervised by a management committee.”

Interest payable will be determined by the CBN periodically. For non-interest banks, profit and loss on the unclaimed balances will be determined by the CBN periodically.

The CBN will refund the principal and any interest on the invested funds to the beneficiaries within 10 working days of receiving a reclaim request from the financial institution.

The guidelines also specify that the CBN will create and manage a dedicated account called the “Unclaimed Balances Trust Fund Pool Account” to warehouse unclaimed balances.

Eligible accounts for dormant status include current, savings, term deposits in local currency, domiciliary accounts, deposits for shares and mutual investments, prepaid card accounts and wallets, and government-owned accounts.

Reactivating a dormant account involves account owners completing a reactivation form at their respective financial institutions and providing evidence of ownership and valid identification.

Some accounts are exempt from being considered dormant, such as those subject to litigation, judgment debts under active court cases, accounts under regulatory investigation, and encumbered accounts like collaterals and liens.

CBN Governor Yemi Cardoso justified this policy by stating that dormant accounts in Nigeria are more susceptible to fraudsters. The apex bank’s latest policy aims to ensure the safekeeping of funds in dormant accounts.