CBN passes important message to bank over fee on dormant account reactivation

• The Central Bank of Nigeria has instructed banks not to charge clients for account reactivation
• This came after it recently directed them to transfer balances that have remained in the dormant account
• Approximately 6.81% of all bank accounts were dormant as of the end of first quarter 2024, or 19.799 million

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

The Central Bank of Nigeria (CBN) has directed banks not to impose fees on customers for reactivation of accounts that have been dormant for up to 10 years.

To manage dormant accounts, the CBN will create and maintain a specific "UBTF Pool Account. Photo Credit: CBN, Ivan Pantic
Source: Getty Images

This comes as the apex bank directed them to transfer balances that have remained in the dormant account, estimated to be not less than N20 trillion to the Unclaimed Balances Trust Fund (‘UBTF) pool account.

BusinessDay reported that UBTF Pool Account means the account designated in CBN for warehousing the unclaimed balances in eligible accounts.

The CBN last week issued the revised guidelines on the ‘Management of Dormant Accounts, Unclaimed Balances and Other Financial Assets in Banks and Other Financial Institutions in Nigeria’, to banks and other financial institutions for implementation.

As of the end of the first quarter of this year, there are 19.799 million dormant bank accounts, accounting for 6.81 percent of all bank accounts nationwide, data from the Nigeria Interbank Settlement System (NIBSS), indicated.

One of the reasons an account becomes dormant is inactivity. Customers might stop using their accounts due to personal reasons, such as relocating, changing banks, or simply not needing the account anymore.

Other reasons include, economic hardship, where financial difficulties can lead to reduced banking activity. People facing economic challenges may not have sufficient funds to keep their accounts active.

Some customers open multiple accounts for different purposes and may neglect some over time, especially if those accounts are not linked to automatic transactions.

According to the directives, the CBN will open and maintain a dedicated ‘UBTF Pool Account’ to manage these funds and will keep detailed records of beneficiaries associated with the unclaimed balances held in the UBTF Pool Account.

CBN predicts new Naira

Legit.ng reported that the Central Bank of Nigeria (CBN) expects the naira to appreciate in the foreign exchange markets driven by better crude oil production and exports.

The apex bank stated this in its latest report titled "Macroeconomic Outlook: Price Discovery for Economic Stabilisation".

According to CBN, the rise in crude export will help bring more forex into the market, reduce depreciation pressures, and strengthen the naira.

Source: Legit.ng