UBTF: CBN moves to warehouse unclaimed customers’ funds in dormant bank accounts

*The Central Bank of Nigeria in line with its guidelines on management of dormant accounts, unclaimed balances, and other financial assets in banks and OFIs, is set to open ‘a pool account’ to warehouse all funds left in dormant savings, current and domiciliary accounts for consumer protection

Isola Moses | ConsumerConnect

The Central Bank of Nigeria (CBN) has indicated banking regulator’s decision to mop-up funds in dormant accounts of customers in various banks in the West African country.

It is recalled the Bankers’ Bank had issued new guidelines to Deposit Money Banks (DMBs) on the operations of dormant accounts that have neither  received deposits nor withdrawals for upwards of a year.

In a circular to all DMBs and Other Financial Institutions (OFIs), the CBN in regard to its guidelines on the management of dormant accounts, unclaimed balances, and other financial assets lodged in banks and OFIs, stated it would open a pool account to warehouse all funds left in dormant savings, current and domiciliary accounts.

The Bank also said it would open and maintain an account earmarked for the purpose of warehousing unclaimed balances in eligible accounts.

ConsumerConnect reports the CBN disclosed the account shall be called ‘Unclaimed Balances Trust Fund (UBTF) Pool Account’.

Why Unclaimed Balances Trust Fund?

On the rationale behind it’s opening the UBTF pool account, the banking sector regulator stated that dormant and unclaimed accounts are now targets of fraudsters.

The CBN further disclosed   that it would invest the warehoused funds in T-Bills and other interest-yielding ventures and return the profits to the owners of the accounts upon reactivation.

It said: “Customers seeking to reactivate dormant accounts to provide evidence of account ownership, valid means of identification, evidence of present place of residence, and affidavit on the accuracy of the information to reactivate the account.

“The dormant accounts shall be reopened and the funds including interest rates, should be returned to the owner upon request within two days.”

CBN’s warns banks, OFIs against infractions

The Bank as well directed commercial banks to continue paying interest into dormant accounts and maintain period communications with account owners via e-mails, SMS and other necessary channels.

The CBN assured it would monitor and enforce compliance of financial institutions with the guidelines through off-site surveillance as well as on-site routine and target examinations.

The Bank warned: “A contravention of any provision of the Guidelines shall attract a penalty of not less than N2 million.

“Failure to comply with CBN’s directive in respect of any infraction shall attract a further penalty of N200,000 daily until the directive is complied with or as may be determined by CBN.”

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