*The Central Bank of Nigeria explains the latest Guidelines On management of dormant accounts, unclaimed balances, and other financial assets issued to Deposit Money Banks and other financial institutions is necessary because depositors may not be 鈥榓dequately compensated鈥�, and such financial assets are 鈥榠ncreasingly susceptible to fraudulent transactions or abuse鈥� in the banking sector

Gbenga Kayode | 绿帽献妻

The Central Bank of Nigeria (CBN) has said the banking regulator issued the latest 鈥淕uidelines On Management Of Dormant Accounts, Unclaimed Balances And Other Financial Assets In Banks And Other Financial Institutions In Nigeria鈥� document issued to the Deposit Money Banks (DMBs) and other financial institutions because they are 鈥渋ncreasingly susceptible to fraudulent transactions or abuse鈥� in the banking sector of the country鈥檚 economy.

绿帽献妻 reports John S. Onojah, Acting Director of Financial Policy and Regulation Department at CBN stated this is in a circular to the DMBs and other financial institutions dated Friday, July 19, 2024.

Some Nigerian deposit money banks

The Bankers鈥� Bank, in the introductory sector of the new Guidelines, noted that the financial institutions (FIs) in Nigeria hold deposit accounts and other financial liabilities in their books with 鈥渘o customer-induced activity over a period鈥�, thus, rendering the accounts dormant.

鈥淭he continuous maintenance of such accounts results in accumulation of huge unclaimed balances at the disposal of the financial institutions for which the depositors may not be adequately compensated.

鈥淚n addition, dormant and unclaimed balances are increasingly susceptible to fraudulent transactions or abuse,鈥� it stated.

The Bank also recalled that it had earlier issued Guidelines on the Management of Dormant Accounts and Other Unclaimed Balances by Banks and Other Financial Institutions in Nigeria, October 7, 20215, in a move to curb abuses in the operation of dormant and inactive accounts and set operational standards.

The CBN, therefore said in order to strengthen the oversight functions of CBN on the management of dormant and unclaimed balances, the Banks and Other Financial Institutions Act, 2020 (BOFIA 2020) equally made explicit provisions on unclaimed funds or abandoned properties in FIs under the regulatory purview of the CBN.

The banking sector regulator asserted: 鈥淭his Guidelines is, therefore, issued pursuant to the powers conferred on the CBN Governor by the CBN Act 2007 and BOFIA 2020 and supersedes the 2015 Guidelines on the Management of Dormant Accounts and Other Unclaimed Balances by Banks and Other Financial Institutions in Nigeria.鈥�

Onojah also noted the new Guidelines takes effect immediately, as he stated that the modalities for the transfer of the relevant balances/funds/assets to the CBN would be communicated to banks and other financial institutions subsequently.