CBN Issues Fresh Guidelines On Unclaimed Balances, Financial Assets In Banks
By Sunday Etuka, Abuja
The Central Bank of Nigeria (CBN) has issued revised Guidelines on the Management of Dormant Accounts, Unclaimed Balances and Other Financial Assets in Banks and Other Financial Institutions in Nigeria.
In a Circular signed by the Acting Director, Financial Policy and Regulation Department, John Onoja, the apex bank directed banks and other financial institutions to transfer relevant balances, funds and assets to its account.
This, it said, was sequel to the conclusion of the review of the Guidelines on the Management of Dormant Accounts and Other Unclaimed Funds by Banks and Other Financial Institutions in Nigeria issued in October 2015.
CBN said, the revised Guidelines, which operationalizes Section 72 of the Banks and Other Financial Institutions Act (BOFIA) 2020, followed engagement and consultations with relevant stakeholders, whose comments and recommendations were considered in the review process.
“It, amongst others, standardises the management of dormant accounts, unclaimed balances and financial assets, and outlines the procedure for the administration of these balances, funds, and assets by banks and other financial institutions in Nigeria.
“The modalities for the transfer of the relevant balances/funds/ assets to the CBN, together with the revised templates for the rendition of quarterly returns to Banking Supervision Department or Other Financial Institutions Supervision Department (as the case may be) will be communicated subsequently.
“This Guidelines supersedes the Guidelines on the Management of Dormant Accounts and Other Unclaimed Funds by Banks and Other Financial Institutions in Nigeria, issued in October 2015 and takes effect immediately”, CBN said.
MORE CLARIFICATION
CBN in the revised guidelines said, Financial institutions (FIs) in Nigeria hold deposit accounts and other financial liabilities in their books with no customer-induced activity over a period, thus, rendering the accounts dormant.
It said, the continuous maintenance of such accounts results to accumulation of huge unclaimed balances at the disposal of the financial institutions for which the depositors may not be adequately compensated.
In addition, it said, dormant and unclaimed balances are increasingly susceptible to fraudulent transactions or abuse.
Consequently, the apex said, it 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 (UBTF) Pool Account”.
In addition, the CBN shall establish a management committee to: “Oversee the operation of the UBTF Pool Account;
“Issue regulations, guidelines and circulars on the administration of dormant/unclaimed balances and financial assets in FIs;
“Monitor and enforce compliance with this Guidelines; Manage the funds in line with the provisions of BOFIA 2020;
v. Establish standard procedures for reclaim of warehoused funds;
“Resolve escalated complaints relating to reclaim of warehoused funds; vii. Publish annually on its website, the list of owners of unclaimed balances that have been transferred to the ‘UBTF Pool Account’;
“Publish on its website, the procedure for reclaim of warehoused funds and other financial assets; and Publish annually a notice in three national daily newspapers inviting members of the public to check details of outstanding unclaimed balances in its custody”.
It, however, revealed that in the case of FIs in liquidation, the Nigeria Deposit Insurance Corporation (NDIC) shall assume the role of the FI.
CBN said, eligible accounts are dormant accounts balances that have remained with the FIs for a period of ten (10) years and beyond.
It listed the eligible dormant accounts/unclaimed balances and other financial assets to include: “Current, Savings and term deposits in local currency; Domiciliary accounts; Deposits towards the purchase of shares and mutual investments; Prepaid card accounts and wallets;
Government Owned Accounts;
“Proceeds of uncleared and unpresented financial instruments belonging to customers or non-customers of FIs;
Unclaimed salaries and wages, commissions, and bonuses;
” Proceeds of stale local and/or foreign currency drafts 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 to which the
Nigerian bank account had not been debited;
A judgment debt for which the judgment creditor has not claimed the amount of judgment award; and Any other deposits or financial assets that may be designated by CBN.
It, however, exempted the the following classes of dormant accounts/financial assets: “Accounts that are subject of litigation;
A judgment debt for which the judgment creditor has not claimed the amount of judgment award and the case is still active in Court; Accounts under investigation by a regulatory authority or law enforcement agency; and Encumbered accounts including, but not limited to, collaterals and liens”.
