E-Financial
Unclaimed monies in dormant accounts to be invested in T-Bills – CBN
Central Bank of Nigeria (CBN) says it will mop up all dormant account balances and unclaimed balances in banks into a Trust Fund account which will ultimately be invested in Treasury Bills.
This is contained in the just released exposure draft of guidelines on the Management of Dormant Accounts, Unclaimed Balances and Other Financial Assets in Banks and Other Financial Institutions in Nigeria.
According to a circular accompanying the exposure draft, the guideline was in response to requests from banks and other stakeholders for the CBN to clarify the procedures for the management of dormant and inactive accounts by banks in the country.
The circular which was signed by the Director of Financial Policy and Regulation Department of the apex bank, Chibuzor Efobi, also called for inputs which should be sent within three weeks.
The draft states that banks and Other financial institutions (OFIs) are expected to transfer all unclaimed balances in accounts that have been dormant for up to 10 years into an Unclaimed Balances Trust Fund (UBTF) pool account which will be domiciled at the CBN.
They are also expected to transfer unclaimed balances quarterly, not later than 15 days of the first month of the subsequent quarter; and retain all records of communication on the management of dormant accounts for a minimum of 10 years.
Banks and OFIs, by the guideline are to “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’; and refund the unclaimed funds to the beneficiaries not later than 10 working days from the date of receipt of the request.”
The exposure draft notes that banks including other financial institutions are saddled with the responsibility of contacting account holders whose account are dormant and are also required to publish the list of dormant accounts on their website.
Asides these, financial institutions are also saddled with the responsibility of monitoring “inactive accounts and notify the customers as well as protect such accounts from unauthorized usage; Establish procedures that will ensure continuous contact with customers to reduce the incidence of inactive/dormant accounts.
“Maintain records of procedures and periodic efforts to contact customers with inactive accounts; advise customers, in writing, on the need to communicate changes in their names, addresses, phone numbers, emails and next-of-kin.”
Financial institutions are also to bear the costs of maintaining inactive and dormant accounts as well as contacting the customers; render quarterly reports on dormant accounts in a prescribed format to Banking Supervision Department and Other Financial Institutions Supervision Department of the CBN.
They are to “continue to reflect dormant account balances as deposit liabilities and such balances, where applicable, shall continue to earn interest until they are transferred to CBN.
“Maintain a register for funds transferred to CBN for reclaim and audit trail. Publish, on their websites, details of all dormant accounts, six months prior to their eligibility for transfer to CBN. However, other financial institutions (OFIs) without websites shall publish same on their Association’s website.
“Publish the list of dormant accounts holders in at least two national daily newspapers, except for unit microfinance banks, which shall publish in their premises. Information to be published shall include the name, address of the branch, and next-of-kin of account holder. It should also be stated that the account has been transferred to the register of dormant account.
Central Bank of Nigeria (CBN) has said that all denominations of Naira banknotes currently in circulation remain indefinitely valid as legal tender and cannot expire or be phased out.
A statement on Friday by Mrs Sidi Ali Hakama, acting director, Corporate Communications, CBN, said all banknotes, including the old and new designs of N1,000, N500, and N200, were valid.
Hakama urged the public to disregard misinformation regarding the validity of the old notes.
“In line with the bank’s previous clarifications and to offer further assurance, the CBN wishes to reiterate that the subsisting Supreme Court ruling granted on November 29, 2023, permits the concurrent circulation of all versions of the N1,000, N500, and N200 denominations of the Naira indefinitely.
“For the avoidance of doubt, all versions of the Naira, including the old and new designs of N1000, N500, and 4200 denominations, as well as the commemorative and previous designs of the 100 denomination, remain valid and continue to be legal tender without any deadline.
“We, therefore, advise the public to disregard any claims that the old series of the aforementioned banknotes will cease to be legal tender on December 31, 2024.
“We urge Nigerians to continue accepting all Naira banknotes (both old and redesigned) for their daily transactions and to handle them with care to ensure their longevity,” she said.
The director encouraged the general public to embrace alternative modes of payment, such as e-channels, to reduce pressure on using physical cash.
The National Pension Commission (PenCom) revealed that Nigeria’s pension fund assets have surged to N21.92 trillion as of October 2024, reflecting a substantial increase of N1.113 trillion from the N20.79 trillion reported in July.
Omolola Oloworaran, PenCom Director General, who made this known, also revealed that the Commission recorded 10.53 million registered contributors as of the same month.
Oloworaran spoke at the 2024 PenCom Media Conference, themed “Tech-Driven Transformation: Shaping the Pension Landscape,” held in Abuja on Thursday.
She stated that the figures reflect the Commission’s unwavering commitment to fund safety, prudent management, and sustainable growth.
However, the DG noted that the economic realities of 2024 and preceding years, including high inflation, the devaluation of the naira, and the lingering effects of unorthodox monetary policies, have eroded the real value of pension funds and impacted contributors’ purchasing power.
To address these challenges, Oloworaran said PenCom has initiated a comprehensive review of its Investment Regulations, focusing on diversifying pension fund investments into inflation-protected instruments, alternative assets, and foreign currency-denominated investments.
“Our goal is to safeguard contributors’ savings and ensure resilience against future economic volatility,” she said.
She further added, “Expanding pension coverage remains a top priority for the Commission. Our revamped Micro Pension Plan leverages technology to incentivize informal sector participation, making it easier for everyday Nigerians to save for retirement. This initiative aligns with our vision of inclusive growth and financial security for all.”
The PenCom boss also highlighted efforts to address delays in retirement benefit payments to retirees of Federal Government treasury-funded MDAs.
“Recently, N44 billion was released under the 2024 budget appropriations to settle accrued pension rights for retirees from March to September 2023. Moving forward, we are working with the Federal Government to institutionalize a sustainable solution, ensuring retirees receive their benefits promptly and without undue stress.”
Oloworaran also highlighted the launch of the e-Application Portal for Pension Clearance Certificates (PCC) in October 2024. She noted that this initiative replaces the manual process, enabling companies to seamlessly apply for and receive PCCs online.
“This year, we have issued 38,528 PCCs, significantly enhancing ease of doing business and ensuring compliance.”
She also stated that the Pension Industry Shared Service Initiative is in advanced stages of implementation. This initiative will digitize pension contributions and remittances, ensuring seamless processing of Retirement Savings Account contributions and resolving discrepancies caused by incomplete remittance details.
“To further enhance contributors’ experiences, we have introduced a revised programmed withdrawal template, simplifying access to voluntary contributions and revising the threshold for en-bloc payments in line with the new minimum wage. These measures are designed to make retirement processes more efficient and user-centric,” she explained.
House of Representatives has urged the closure of illegal loan platforms used by “one chance” operatives to extort money from unsuspecting victims.
This decision followed a motion of urgent public importance presented by Billy Osawaru during Wednesday’s plenary session.
Osawaru highlighted the activities of these operatives as “heinous,” explaining how their actions leave victims in dire conditions.
He noted that victims are often subjected to severe torture and forced to hand over personal information, which is then exploited.
“In many cases, the phone numbers and bank accounts of victims are used to borrow money from illegal and unauthorised loan apps, thereby incurring huge debts that the victims are forced to repay,” Osawaru said.
The lawmaker also expressed concern over the reluctance of banks to assist complainants without a Police report.
He called on the Nigeria Police, banks, and FinTech operators such as Opay and MoniePoint to prioritize cases of “one chance” operations and kidnappings reported to them.
The motion was adopted unanimously by the House without further debate.
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