Last Updated on 19 July 2024 by Naijadazz
The Central Bank of Nigeria is currently introducing a new policy for the management of dormant accounts and the unclaimed balance on these accounts within the Nigerian financial system. This innovation is captured in a document titled “Guidelines on Management of Dormant Accounts, Unclaimed Balances, and Other Financial Assets in Banks and Other Financial Institutions in Nigeria.” It revolutionizes the handling and probable use of such idle funds.
At the heart of this new approach is the creation of the Unclaimed Balances Trust Fund Pool Account. This shall be a unique repository where funds that are ten years old and above would be warehoused. And in something of a radical move, the CBN is touting to deploy the funds to investing in the NTBs and whatever other government-approved securities may be, to make erstwhile idle assets potent drivers of the economy.
It, however, said the CBN has assured that such an investment strategy will not hurt the rights of holders of such accounts. According to the guidelines, there should be an instant ten-day refund of the principal amount paid, along with any accrued interest to such rightful beneficiaries, should they so request. This was an instance of balance between milking dormant funds and interest holders’ protection—a hallmark of CBN ingenuity in responsible financial stewardship.
This has far-reaching implications in that it covers all classes of bank accounts, including current, savings, and domiciliary accounts; Untaxed Salaries; and other sundry financial instruments. The CBN has, however, wisely ruled out accounts under litigation or used for collateral, so as not to interfere with any financial or legal commitments already contracted.
One key area for this new approach in transparency is that the CBN makes periodic disclosure to the general public. It commits to annual notices in national dailies and online publications of details of unclaimed balances. Through open communication, account holders are reunited with their money forgotten, and this may reunite many Nigerians with long-lost assets.
Clear roles for the different stakeholders were also brought out by the guidelines. The financial institutions, at their own instance, are to monitor and ensure protection for all inactive accounts. The account holders are advised to take steps to update their information and follow established process for reclaiming their money. Where the banks are undergoing liquidation processes, the Nigeria Deposit Insurance Corporation steps in to take over the functions of the banks in relation to the management of the unclaimed balances.
This step by the CBN is quite innovative. Firstly, it solves the problem of dormant accounts that has been plaguing it for so long. Again, this presents an opportunity to harness such idle funds toward their potential economic benefit. While evolving, this policy would have set a new standard in financial asset management: striking a balance between economic utilization and consumer protection.
This new frontier of unclaimed balance management is going to be watched very keenly by the financial sector and the general public, as it may turn these hitherto forgotten funds into a really dynamic element in Nigeria’s financial scene.
