The Central Bank of Nigeria (CBN) has banned banks from converting funds from dormant and inactive accounts into income, even as it charged banks to get in contact with the next of kin of such account holders.
The CBN in the guidelines on the management of dormant and inactive accounts to all financial Institutions and banks recently released and signed by the Director, Finance and Policy, Kelvin Amugo compelled banks to call or send messages to the customer of the inactive account, even after six months of non-transaction.
The apex bank noted that all customers account that do not operate for a period of six months will be referred to as inactive and if persists for a year, the bank could categorize it as dormant account.
According to the guideline, “interest-bearing accounts shall retain their interest earning status during the period of dormancy”
Also “deposit taking financial institutions shall continue to monitor accounts that show tendencies of inactivity and initiate actions for their reactivation or protection from wrong usage. Such actions shall include, though not limited to any of the following: SMS. e-mail, visitation, and/or phone calls. In all cases, the cost of monitoring the accounts and contacting the customers shall be borne by the bank.
“Dormant account balances shall continue to be reflected in the books of banks as deposit liabilities until they are eventually withdrawn by the account holders or disposed of, on their instructions” the guideline stated adding that dormant accounts balances shall be covered by Deposit Insurance Scheme.
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