Thursday, June 20, 2024
HomeLATEST NEWSCBN To Take Over Money In Dormant Accounts

CBN To Take Over Money In Dormant Accounts

CBN To Take Over Money In Dormant Accounts

A new regulatory framework established by the Central Bank of Nigeria (CBN) will allow it to take over billions of naira from dormant bank accounts, store them, and use the revenues to buy treasury bills and other government securities.

In recently released guidelines on the management of dormant accounts, unclaimed balances and other financial assets in banks and other financial institutions in Nigeria, the CBN explained the management procedures for monies trapped in dormant accounts, what the funds might be utilised for, awaiting customer refunds, compliance expectations, monitoring and evaluation, dispute resolution, and penalties for infractions.

The Unclaimed Balances Trust Fund (UBTF), with a substantial management committee for the appropriate administration of the money, will be established by the apex bank, according to the circular signed by the CBN’s financial policy and regulation department director, Chibuzo Efobi.

The document specified that eligible accounts are those with balances that have become dormant at financial institutions for at least 10 years.

Affected financial assets include dormant accounts, unclaimed balances, and other assets in savings, current, term, and domiciliary accounts. Financial assets, including those kept on cards and wallets as salary, wages, bonuses, or commissions, would be transferred to the UBTF Account Pool for CBN safekeeping.

The guideline also detailed that “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’s 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” will also be taken into the custody of the apex bank.

The CBN disclosed that the money from the dormant accounts might be invested in Nigerian treasury bills and other securities with the permission of the Unclaimed Balances Management Committee.

The bank explained that to access the funds, a beneficial owner must fill out an asset reclaim form at any bank. Financial institutions then have up to 10 working days to process and verify the claims before sending the request to the CBN.

Within another 10 working days, the apex bank must return the funds to the financial institution that submitted the initial payment request so they can be remitted to the claimant, who has an unrestricted right to pursue the claim. The bank also gives 15 working days to resolve disagreements that might arise quickly.

After implementing the CBN’s latest directive, banks will forfeit custody of the billions of naira currently held in various dormant accounts.

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments