CBN opens up on what to do with dormant accounts, explains real reason it plans to mage N2trn in UBA, Zenith, others

• The governor of the CBN has voiced concerns on the vulnerability of dormant bank accounts to fraudulent activities
• According to Cardoso, the benchmark interest rate has risen to 26.75 percent, a 50 basis point increase
• Based on requirements, dormant balances that have not been used for a minimum of ten years will be transferred to the CBN

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), has expressed worry about the susceptibility of inactive bank accounts to fraudulent activity.

CBN explained that accounts that remain inactive for extended periods of time are oftentimes prime candidates for identity theft. Photo Credit: CBN
Source: Getty Images

Speaking to reporters on Tuesday after the two-day Monetary Policy Committee (MPC) meeting, Cardoso stated that the benchmark interest rate had increased by 50 basis points to 26.75 percent.

He clarified that accounts that are left idle for long periods of time are frequently easy targets for identity theft and unauthorized access by scammers.

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“With respect to dormant accounts, what I found personally is that if you leave accounts dormant in banks, they are sometimes more susceptible to fraudsters copying your identity and trying to gain hold of the system to grab your money. So, that is a problem I think most banks face.“The policy and the directive are meant to ensure that all those monies come to the Central Bank for safekeeping and it is at zero cost to the beneficiaries. All that will happen is that the Central Bank will manage the money within our possession and when the rightful owner surfaces, the money is returned plus whatever income has accrued.”

In its new "Guidelines on Management of Dormant Accounts, Unclaimed Balances, and Other Financial Assets in Banks and Other Financial Institutions in Nigeria," released last week, the CBN declared its intention to allocate funds from dormant accounts, unclaimed balances, and other financial assets into Nigerian Treasury Bills (NTBs) and other government securities.

In compliance with these directives, the CBN would set up a committee to supervise the management of unclaimed balances and form a "Unclaimed Balances Trust Fund (UBTF) Pool Account" to hold unclaimed amounts. This committee will set rules, oversee adherence, oversee finances, and deal with grievances and claims.

According to the criteria, Premium Times reported that accounts with dormant balances that have been idle for ten years or longer are eligible for transfer to the CBN.

These accounts include government-owned accounts, prepaid card accounts and wallets, domiciliary accounts, deposits for shares and mutual funds, term, current, and savings deposits in local currency, and revenues from uncleared financial instruments.

Others include unpaid salary, wages, commissions, bonuses, earnings from stale drafts, and money received from correspondent banks that lack clear recipient information, according to the apex bank.

Fraudsters swindle N18 billion from banks, PoS operators

Legit.ng reported that the Nigeria Inter-Bank Settlement System has revealed that financial institutions suffered approximately N17.67 billion in losses due to fraud in 2023.

This was revealed in the NIBSS' Annual Fraud Landscape report (January to December 2023) published on its website.

Established in 1993, NIBSS facilitates same-day clearing and settlement of inter-bank transfers and payments.

Source: Legit.ng