The number of dormant bank accounts in Nigeria is over 19.69 million, according to the industry customer account database released by the Nigeria Inter-Bank Settlement System.
The data, which tracks monthly account statuses throughout 2024, indicates a steady rise in inactive accounts, coinciding with new regulatory measures by the Central Bank of Nigeria requiring commercial banks to publish details of dormant accounts.
The CBN directive, issued to enhance transparency and return unclaimed funds to rightful owners, comes amid concerns that a significant number of accounts have remained idle for extended periods.
According to the NIBSS data, dormant accounts remained above 19 million every month since February 2024, with December closing at 19,697,125 inactive accounts.
This represents an increase of 1,205,000 from January’s figure of 18,492,169, marking a 6.51 per cent rise over the year.
The peak was recorded in May and June when the number reached 20.57 million before dropping slightly in the second half of the year.
The data further shows that there was an increase of 2.08 million dormant accounts between the first six months of 2024 before the CBN’s July directive on such accounts.
Following the directive, the PUNCH reported that many bank customers affected by the new CBN guidelines on dormant accounts rushed to their various banks on Tuesday to reactivate the accounts.
The CBN directive led to a 1.59 million decrease in the number of dormant accounts, according to the NIBSS data. After the decline, there was a fluctuating increase for the remaining months of the year.
Closed accounts also showed a consistent upward trend, reaching 25.48 million in December, up from 21.71 million in January. For the entire year, 3.78 million accounts were closed in 2024, according to the NIBSS data.
Active accounts also grew significantly over the same period, rising from 209.31 million in January to 311.65 million in December. This increase of 102.3 million accounts represents a 48.9 per cent growth, indicating a continued expansion in banking activity and financial inclusion.
The CBN earlier reaffirmed its directive to all banks and financial institutions to publicly disclose details of dormant accounts, unclaimed balances, and other financial assets on their official websites.
A dormant account refers to a bank account that has remained inactive for at least one year.
The directive was outlined in a circular issued on Monday and signed by Michael Akuka on behalf of the Director of CBN’s Financial Policy and Regulation Department.
The circular, titled “Guidelines on Management of Dormant Accounts, Unclaimed Balances, and Other Financial Assets in Banks and Other Financial Institutions in Nigeria”, specifies that financial institutions must display key details such as the names of individuals authorised to operate the accounts, the type of account, and the branch where it is domiciled.
This information must be made available on their official websites. For other financial institutions that do not have dedicated websites, the CBN has mandated that the information be published on the websites of their respective industry associations.
The circular states, “In furtherance thereof, and in response to enquiries from stakeholders regarding the possible breach of the Nigeria Data Protection Act, 2023 (NDPA), banks and other financial institutions are required to note the following.
“1. Section 25 (b) of the NDPA permits justifiable deviations from the general principles of the Act. Also, Section 72. (ii) of the Banks and Other Financial Institutions Act mandates the Central Bank of Nigeria to issue Guidelines on the administration of unclaimed funds in banks and other financial institutions.
“2. Information to be published on banks’ websites, as well as the association’s website (where applicable), shall include the name of the account, the type of account, the name of the bank, and the branch where the account is domiciled ONLY.
“Information to be published annually in at least two national daily newspapers or the premises of State and Unit microfinance banks shall also convey the details as listed in (2) above.”
This directive follows an earlier order issued by CBN on July 19, 2024, requiring banks and financial institutions to transfer unclaimed balances and dormant account funds to the apex bank’s designated accounts.
According to the CBN, all dormant accounts and unclaimed balances with banks for at least 10 years will be warehoused in a dedicated account known as the Unclaimed Balances Trust Fund Pool Account.
The apex bank added that the funds from dormant accounts, and unclaimed balances may be invested in Nigerian Treasury Bills and other government securities.
The CBN, however, said the new guidelines, which is a review of the guidelines issued in October 2015, exempted dormant accounts and unclaimed balances under litigation and investigation.
The guideline reads, “CBN shall treat unclaimed balances (dormant accounts and financial assets) as follows:
“Open and maintain the ‘UBTF Pool Account’, maintain records of the beneficiaries of the unclaimed balances warehoused in the UBTF Pool Account.
“Invest the funds in Nigerian treasury bills (NTBs) and other securities as may be approved by the ‘Unclaimed Balances Management Committee.
“Refund the principal and interest (if any) on the invested funds to the beneficiaries not later than 10 working days from the date of receipt of the request and where it is imperative to extend the timeline, a notice of extension shall be communicated to the requesting FI stating reasons for the extension.”
Justifying this move, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, said that monies in dormant accounts in banks are susceptible to fraud.
At the end of the 296th meeting of the Monetary Policy Committee in Abuja, Cardoso said, “With respect to dormant accounts, what I found personally is if you leave accounts dormant in banks, sometimes more than when you don’t leave them dormant in banks. In fact, most times, they are more susceptible to fraudsters copying your identity and trying to gain hold of the system to grab your money. So, that is a problem I think most money banks face.”
“The policy and the directive are meant to ensure that all those monies come to the central bank for safekeeping and it is at zero cost to the beneficiaries. All that will happen is that the central bank will manage the money within our possession and when the rightful owner surfaces, the money is returned plus whatever income is accrued to you.”
The increasing number of dormant accounts raises concerns about financial inclusion and banking engagement strategies
While the rise in active accounts suggests strong banking adoption, the persistently high dormant and closed account numbers indicate that financial institutions need to re-evaluate their customer retention approaches.
While there is no latest figure on the total value of unclaimed funds in dormant accounts, the former minister of finance, budget and national planning, Zainab Ahmed, earlier said that the Federal Government would have access to as much as N850bn from the special trust fund of unclaimed dividends and dormant account balances.
She said, “On the issue of unclaimed dividends and government’s accounts and projections, there would be as much as ₦850 billion to be realised into the special trust fund of unclaimed dividends.
Credit: punchng.com
