CBN Tells Banks To Hand Over Funds In Dormant Accounts, Unclaimed Dividends

The Central Bank of Nigeria (CBN) has directed banks and financial institutions to transfer unclaimed dividends and dormant account balances into a CBN-controlled account.

The CBN will decide on government securities to invest these funds, subject to the Unclaimed Balances Management Committee’s approval.

This directive, outlined in the ‘Guidelines on Management of Dormant Account and Unclaimed Fund’ published on Friday, is effective immediately. The CBN will maintain an account called the “Unclaimed Balances Trust Fund (UBTF) Pool Account” for this purpose, according to the document obtained by THE WHISTLER.

The Securities and Exchange Commission reported unclaimed dividends valued at N190bn as of August 2023. The issue gained attention following the enactment of the Finance Act 2020 by former president Muhammadu Buhari. The Act mandates the transfer of unclaimed dividends of publicly listed companies and dormant account funds unclaimed for over six years to the Unclaimed Funds Trust Fund.

However, a Federal High Court in Abeokuta has prevented the federal government from seizing these unclaimed dividends. This development coincides with President Bola Tinubu’s recent request for an additional N6.2tn, raising the 2024 budget from N28tn to N34tn. To finance the budget, the federal government plans to tax banks’ foreign exchange gains.

The CBN’s directive requires banks to maintain records of beneficiaries of unclaimed balances in the UBTF Pool Account. Additionally, unclaimed dividends and dormant accounts will be invested in government securities. The CBN will invest these funds in Nigerian treasury bills (NTBs) and other approved securities. Beneficiaries will receive refunds of the principal and any interest within ten working days of a request, with possible extensions communicated as necessary.

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