Dormant accounts guidelines: CBN slams N2m fine on erring banks
The Central Bank of Nigeria, CBN, has slammed banks that disobey its new guidelines on the management of dormant accounts, unclaimed balances, and other financial assets in financial institutions in the nation with a minimum fine of N2 million as punishment.
CBN new Directive for Dormant account
A bank account that has been inactive for at least a year is considered a dormant account by CBN. If six months have passed since the last customer- or depositor-initiated transaction and there have been no customer- or depositor-initiated transactions, the account is deemed inactive.
The CBN’s director of financial policy and regulation, Mr. Chibuzo Efobi, announced the rules in a circular, and the apex bank added that a further daily fine of N200,000 would be imposed until full compliance.
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Any violation of a rule in the guidelines will result in a fine of at least N2 million, according to the apex bank. The CBN may impose additional fines of N200,000 per day until the directive is followed or as it deems appropriate in the case of noncompliance with any directive.
The guidelines were released, according to CBN, in response to requests from banks and other stakeholders for the apex bank to clarify the process for the management of inactive and dormant accounts by Nigerian banks.
The regulations state that the financial institution is responsible for maintaining inactive and dormant accounts as well as getting in touch with customers. provide the Banking Supervision Department and Other Financial Institutions Supervision Department, CBN, with quarterly reports on dormant accounts in the prescribed format; Notify account owners in writing as soon as an account becomes dormant or inactive using the agreed-upon method, such as email, text message, or letter; reactivate inactive accounts at the account owner’s or his/her authorised representatives’ request; Maintain the status of dormant account balances as deposit liabilities; where applicable, such balances shall continue to accrue interest until transferred to the CBN.
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The Nigeria Interbank Settlement System, NIBSS, reported in its electronic fact sheet for 2021 that there were 191.4 million bank accounts as of December 2021, with 133.5 million of those accounts being actively used by 122.3 million active bank customers.
This suggests that during the time frame, 57.9 million inactive accounts were registered.
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