CBN’s directive on dormant accounts’ in order – Unegbu

A financial expert, Mr Okechukwu Unegbu, says the directive by the Central Bank of Nigeria (CBN), that balances of dormant accounts be transferred to it, was in order.Unegbu, a seasoned banker and past president of Chattered Institute of Bankers of Nigeria (CIBN), said this in an interview with the News Agency of Nigeria (NAN) on Sunday in Abuja.According to him, monies in dormant accounts run into billion of Naira, which most Deposit Money Banks (DMBs) usually continue to invest without accountability.He said that the DMBs were supposed to contact the accounts holders or their representatives when bank accounts are not operated for a considerable length of time.'But they usually do not make such contact.'The money in dormant accounts run into billions of Naira, which the banks continue to invest.'Sometimes, if the owners of the account show up,the DMB works out the interest if it is a savings account. But if it is a current account, the bank pays no interest, which is unfair.'What the CBN is tr ying to do is to deprive the banks the monies they have been using to do business without accountability,' he said.Unegbu said that the CBN might want to lend out such monies to the Federal Government to bridge revenue shortage and support infrastructural development.He urged the apex bank to be particularly vigilant in implementing the directive as some banks would want to present some dormant accounts as normal.'Some of the banks might want to hide details of dormant accounts from the CBN so as not to remit all.See also Expert advocates financial symbiosis between industries, academia in Nigeria' Others might want to make dormant accounts look like working accounts to avoid transferring their balances to the CBN.'The apex bank will have to do a lot of work bothering on intelligence, by engaging experts in banking operations, to be able to implement the directive effectively, ' he said.NAN reports that the CBN, on Friday, announced implementation of stricter regulations for managing dormant acc ounts and unclaimed financial assets in banks and other financial institutions.The apex bank released the guidelines in a circular by John Onojah, Acting Director, Financial Policy and Regulations Department.The guidelines also reduced the dormancy period of accounts from six years of inactivity to 10 years with no customer activity.After 10 years of dormancy, the guidelines allow eligible account balances and unclaimed financial assets to be transferred to a special account managed by the CBN.Source:News Agency of Nigeria