Nigeria: This Is What CBN Plans On Doing With Dormant Banks Account
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.”
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