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CBN plans to create trust fund accounts for unclaimed dividends, dormant accounts balances

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The Central Bank of Nigeria (CBN) is proposing that banks move funds from dormant accounts that have been inactive for up to ten years into trust fund accounts.

The CBN stated its intention in the recently exposed draft of guidelines on the management of dormant accounts, unclaimed balances, and other financial assets in Nigerian banks and other financial institutions.

According to a circular accompanying the exposure draft, the guideline was created in response to requests from banks and other stakeholders for the CBN to clarify the procedures for banks in the country to manage dormant and inactive accounts.

The circular, which was signed by the apex bank’s Director of the Financial Policy and Regulation Department, Chibuzor Efobi, also requested input within three weeks from members of the public and other stakeholders.

The draft stated that banks and other financial institutions would be required to deposit all unclaimed funds into an Unclaimed Balances Trust Fund pool account, which will be managed by the CBN.

The apex bank stated that the amounts would be invested in government assets such as Treasury Bills and refunded to the beneficiaries within ten days of notification.

“The Central Bank of Nigeria shall open and maintain an account earmarked for the purpose of warehousing unclaimed balances in eligible accounts. The account shall be called ‘Unclaimed Balances Trust Fund Pool Account,” CBN said.

Current, savings, and term deposits in local currency; domiciliary accounts; deposits towards the purchase of shares and mutual investments; prepaid card accounts and wallets; proceeds of uncleared and unpresented financial instruments belonging to FI customers or non-customers; unclaimed salaries and wages, commissions, and bonuses are all eligible accounts and financial assets.

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Others include the proceeds of stale local and/or foreign currency drafts that were not presented for payment by beneficiaries; funds received from a correspondent bank without sufficient details as to the rightful beneficiary and/or a recall of funds made to the remitting bank for which the Nigerian bank’s account was not debited; and a judgment debt for which the judgment creditor has not claimed the amount of judgment award.

According to the central bank, any bank or financial institution that violates any of the new criteria will face a fine of at least N2,000,000.

It further stated that failing to comply with CBN’s order in relation to any infringement would result in a daily penalty of N200,000 until the directive is followed or as determined by CBN.

The guidelines’ objectives, according to the CBN, are to “identify dormant accounts/unclaimed balances and financial assets with a view to reuniting them with their beneficial owners; hold the funds in trust for the beneficial owners; standardise the management of dormant accounts/unclaimed balances and financial assets; and establish a standard procedure for reclaiming warehoused funds.”

In addition, the CBN stated that it will publish an annual list of the owners of unclaimed sums moved to the pool account, as well as the method for reclaiming warehoused assets.

The Federal Government confirmed plans to borrow unclaimed profits and funds in inactive account balances of Deposit Money Banks in the approved Finance Act 2020. This was revealed in Part XII of

The Federal Government confirmed plans to borrow unclaimed dividends and funds in inactive account balances of Deposit Money Banks in the approved Finance Act 2020. This was revealed in Part XII of the Companies and Allied Matters Act in the Finance Act.

The move elicited reactions from stakeholders and a lawsuit from the Socio-Economic Rights and Accountability Project in 2021.

(omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

 

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