Nigeria’s apex bank, Central Bank of Nigeria (CBN), has
introduced new guidelines for the treatment and management of dormant
accounts by commercial banks.
According to Punch, the objectives of the policy is to ensure that dormant account funds are identified and channelled through appropriate institutions to make them more productive to the economy and eliminate the possibility of banks converting dormant account balances to income.
In a circular released and signed by the CBN’s Director, Financial Policy and Regulation Department, Mr. Kevin Amugo yesterday, the regulatory bank 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.
According to Punch, the objectives of the policy is to ensure that dormant account funds are identified and channelled through appropriate institutions to make them more productive to the economy and eliminate the possibility of banks converting dormant account balances to income.
In a circular released and signed by the CBN’s Director, Financial Policy and Regulation Department, Mr. Kevin Amugo yesterday, the regulatory bank 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.
The circular read, “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).
“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).
The statement said, “Dormant account balances shall continue
to be reflected in the books of banks as deposit liabilities until they
are eventually withdrawn by the account holders or disposed of on their
instructions. Dormant account balances shall, therefore, be regarded as
deposits and shall be covered by deposit insurance.
“In the case of government-owned inactive/dormant accounts, banks shall notify the relevant government agency of their existence, with periodic returns of such notification sent to Banking Supervision Department. Banks are also required to turn over the funds to the concerned treasury after six years of inactivity.
“In the case of government-owned inactive/dormant accounts, banks shall notify the relevant government agency of their existence, with periodic returns of such notification sent to Banking Supervision Department. Banks are also required to turn over the funds to the concerned treasury after six years of inactivity.
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