In a significant policy shift, the Central Bank of Nigeria (CBN) has approved a process allowing next-of-kin, beneficiaries, and legal agents to claim funds from dormant accounts, ending years of uncertainty for many Nigerians.
The apex bank, in its latest directive, mandated all financial institutions to facilitate the retrieval of funds from inactive accounts, provided claimants present valid legal documentation. This move is part of the CBN’s broader effort to enhance financial accountability and transparency in the banking sector.
Clear Process for Claims
Under the new guidelines, individuals seeking to access funds from dormant accounts must submit legal proof of ownership. For corporate entities, documents detailing the directors and authorized signatories will be required.
Once a claim is submitted, banks will verify the details and forward the request to the CBN, which will process and release the funds—along with any accrued interest—within ten business days.
Speaking on the development, a banking sector analyst noted that the move would ease tensions among families who have struggled to reclaim funds from their deceased relatives’ accounts.
“This policy will provide relief for thousands of Nigerians who have been unable to access funds legally belonging to them. Many beneficiaries face bureaucratic bottlenecks when trying to retrieve dormant account balances, but with this directive, there is now a structured process,” the analyst said.
CBN Takes Charge of Dormant Funds
The directive establishes the CBN as the primary custodian of dormant funds through a dedicated Unclaimed Balances Trust Fund (UBTF) Pool Account. Instead of sitting idle, these funds will be invested in treasury bills and other approved securities, ensuring they generate returns until claimed.
Financial experts have lauded the policy, noting that it aligns with global best practices for managing unclaimed funds. However, concerns remain about how efficiently the CBN will administer the process and whether beneficiaries will face unexpected hurdles.
What Qualifies as a Dormant Account?
According to the new framework, an account is classified as inactive if no customer-initiated transactions occur for six to twelve months. If inactivity persists for a full year, the account is officially deemed dormant and will remain so until the account holder reactivates it.
If a bank loses its operating license, the Nigeria Deposit Insurance Corporation (NDIC) will assume responsibility for handling dormant accounts, ensuring depositors’ funds are safeguarded.
Notably, dormant domiciliary accounts are also subject to this policy, although active domiciliary accounts will not be affected.
Unclaimed Funds to be Transferred After 10 Years
The new guidelines apply to various account types, including current, savings, term deposits, domiciliary accounts, prepaid card accounts, deposits for shares, and government-owned accounts. However, accounts involved in litigation, under investigation, or restricted by legal orders will not be subject to the policy.
If an account remains unclaimed for ten years or more, the funds will be moved under the CBN’s management. Banks have also been directed to notify account holders when an account becomes inactive and to send quarterly reminders thereafter.
This follows an earlier CBN directive requiring all unclaimed funds to be transferred to a central account controlled by the apex bank.
Reactions and Implications
Financial experts have reacted with mixed opinions, with some commending the initiative as a step towards financial stability and asset management, while others warn about potential bureaucratic challenges in reclaiming funds.
A Lagos-based economist, while supporting the policy, raised concerns about implementation.
“The CBN’s intention is clear: to ensure unclaimed funds are properly managed and available to their rightful owners. However, the process must be transparent and accessible to the common Nigerian. If claimants encounter unnecessary red tape, the policy may end up frustrating those it seeks to help,” he cautioned.
