Why CBN barred banks from claiming dormant accounts

In from Ali Smart … .
Fresh fact has emerged as to why the Central Bank of Nigeria (CBN) placed a moratorium on banks to desist from converting funds in dormant accounts to personal income.
Ripples was reliably informed by a top source at the apex bank that the decision became necessary to forestall the incidence of fraud within the banking sub-sector.
According to the source, who asked not to be named because he was not authorised to speak for the bank, “In the past such avenue was used as conduit pipe to misappropriate depositors’ funds.”
Expatiating, the source said: “The whole essence of the policy is to ensure accountability and transparency within the banking set up. It is mainly to prevent and discourage any form of infraction on the part of those in the system. The whole idea is aimed at boosting confidence among prospective and old customers of the banks.”
It may be recalled that the apex bank frowned at a situation where banks had a penchant for converting funds in their dormant accounts to income and urged them to reclassify them as deposits.

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The ban was contained in the Guidelines on the Management of Dormant Accounts and Other Unclaimed funds by banks and other financial institutions in Nigeria, released last Friday by the CBN.
The guidelines stated, “Dormant account shall continue to be reflected in the book of banks as deposit liabilities until they are eventually withdrawn by the account holders or disposed of, on their instructions.
“Banks that have, in the last five years, from the date of these guidelines, appropriated credit balances in dormant accounts to income are to reclassify such accounts to deposits not later than six months from the effective date of the guidelines “Notwithstanding the provisions above, banks shall retain the records of all dormant accounts irrespective of the number of years of dormancy of the accounts, and shall reactivate such accounts upon request by the bona fide account holder or his /her legitimate representatives.”

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