Nigeria’s number one bank, Central Bank of Nigeria (CBN), has laid down a set of new guidelines for the treatment and management of dormant accounts by commercial banks, Punch reports.
According to CBN, 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.
A press released by Mr. Kevin Amugo, the CBN’s Director, Financial Policy and Regulation Department, 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.
An excerpt from Punch publication reveals the content of the press released:
“It is in view of the above and the imperative to promote transparency in the financial system that the CBN hereby issues these guidelines to provide a standard for the treatment and management of dormant account balances in Nigeria.
“The purpose of the policy is to curb possible abuse in the operation of dormant accounts, set operational standards for banks and other financial institutions in line with best practice, and to reinforce the property rights as guaranteed in the 1999 Constitution of the Federal Republic of Nigeria (as amended).
“A dormant account shall be a bank account that has no customer or depositor originated transaction within a specified period of six years after the last customer or depositor initiated a transaction. However, such an account shall be recognised as inactive after the first six months of non-depositor or customer originated transaction in it.”
“Accounts shall retain their interest earning status during the period of dormancy in the bank. Deposit-taking financial institutions shall continue to monitor accounts that show tendencies of inactivity and where necessary, initiate actions for their activation or protection from wrong usage.
“Once dormant accounts exceed a six-year period, they shall be reported to the CBN along with efforts made by the obligor bank to locate the owners or their personal representatives.”