In a decisive move aimed at enhancing financial transparency and ensuring proper management of unclaimed funds, the Central Bank of Nigeria (CBN) has directed all commercial banks and financial institutions to publicly disclose details of dormant accounts, unclaimed balances, and other financial assets on their official websites.
This directive, outlined in a circular issued on Monday, is part of the newly introduced “Guidelines on Management of Dormant Accounts, Unclaimed Balances, and Other Financial Assets in Banks and Other Financial Institutions in Nigeria.” The circular was signed by Michael Akuka on behalf of the Director of CBN’s Financial Policy and Regulation Department.
Mandatory Disclosure of Dormant Accounts
As per the guidelines, a bank account is classified as dormant if it remains inactive for at least one year. Under the new regulations, financial institutions are required to publish the names of account holders, account types, and the branches where the accounts are domiciled. This information must be made available on their respective websites to allow rightful owners to reclaim their funds and to promote financial accountability.
For other financial institutions (OFIs) that do not operate dedicated websites, the CBN has mandated that such information be published on the websites of their respective industry associations.
“In furtherance of this directive, and in response to concerns raised by stakeholders regarding compliance with the Nigeria Data Protection Act, 2023 (NDPA), banks and other financial institutions must adhere to the following,” the circular stated.
Key Provisions of the Directive:
- Legal Backing for the Disclosure
- Section 25 (b) of the Nigeria Data Protection Act (NDPA) permits justifiable exceptions to the general principles of the Act in specific circumstances.
- Section 72(ii) of the Banks and Other Financial Institutions Act empowers the CBN to issue guidelines on the administration of unclaimed funds in banks and other financial institutions.
- Details Required for Publication
- The name of the account holder
- The type of account (savings, current, fixed deposit, etc.)
- The name of the bank
- The branch where the account is domiciled
- Publication Requirements
- Banks must publish the information annually on their official websites.
- For financial institutions without dedicated websites, the details must be published on the website of their respective industry associations.
- The information must also be published in at least two national daily newspapers or displayed at the premises of state and unit microfinance banks.
A Follow-up to Prior CBN Directives
This recent directive follows an earlier instruction issued by the CBN on July 19, 2024, which mandated banks and financial institutions to transfer unclaimed balances and dormant account funds to designated accounts held by the apex bank.
The move is seen as part of the broader effort to ensure that unclaimed funds do not remain idle indefinitely and can be reintegrated into the financial system. It also serves to prevent fraudulent activities, as undisclosed dormant accounts could be exploited for illicit financial transactions.
Public Reactions and Industry Concerns
While the CBN’s decision has been welcomed by financial analysts as a step towards enhanced transparency, concerns have been raised regarding data privacy and the potential risks of publicly disclosing financial details. However, the central bank has assured that the disclosure will be strictly limited to essential account details, with no sensitive financial data being shared.
Furthermore, the directive aligns with global best practices where financial institutions periodically publish dormant account details to allow rightful owners to reclaim their funds before they are transferred to government or regulatory bodies.
Next Steps for Account Holders
Bank customers with dormant accounts are advised to visit their financial institutions to reactivate their accounts or make necessary claims before their balances are transferred as per CBN’s regulations. Individuals who suspect their accounts may fall under this category are encouraged to check their bank’s official website or the relevant industry association’s platform for listed dormant accounts.
The CBN has reiterated its commitment to ensuring accountability, protecting customers’ rights, and upholding financial integrity within the Nigerian banking system. It remains to be seen how banks will implement this directive and the extent to which it will impact the management of unclaimed funds in the country.
