Afrigather Mythbusters: is Nigeria’s Central Financial institution making an attempt to “steal” the cash in your dormant account?
When Nigeria’s Central Financial institution directed banks and different monetary establishments on Friday to switch possession of dormant accounts and unclaimed balances, the instant response from the general public was mistrust.
On social media, a couple of outstanding handles suggested their followers to go to their banks and acquire all the cash of their dormant accounts earlier than the CBN accessed it. “They wish to take all the cash. Go and reactivate your accounts now,” one X person wrote.
The parable: The federal government desperately wants cash to fund a large deficit price range and needs the cash in your dormant account. In spite of everything, it simply slapped a windfall tax on banks’ FX positive aspects.
It’s a wonderful story, nevertheless it’s not true.
The information: The CBN’s current directive is predicated on an October 2015 guideline “to curb abuses within the operation of dormant and inactive accounts and set operational requirements.”
A revised model of the rules launched this week seeks to establish dormant accounts and unclaimed balances, maintain the funds within the Unclaimed Balances Belief Fund (UBTF) Pool Account, and in the end standardise the method.
This coverage does three crucial issues. First, the CBN safeguards the unclaimed funds within the devoted pool account and maintains data of the beneficiaries. Banks are anticipated to publish dormant account lists six months earlier than being transferred to the CBN. Second, the CBN can make investments the funds in treasury payments and different securities to mop up liquidity. Third, it would cut back the fraud dangers related to dormant accounts.
Right here’s how to consider it: the CBN manages every thing round unclaimed balances, from sustaining data, investing the funds, and, most significantly, establishing commonplace procedures for reclaiming the funds. In fact, the CBN isn’t doing these out of the goodness of their coronary heart. The objective is to place idle funds to work and channel the earnings into strategic public investments like infrastructure and welfare initiatives.
A clear course of for managing unclaimed funds is a win for banks and the CBN. Whereas it would cut back the dimensions of banks’ stability sheets, the CBN takes some burden off the banks. Clients additionally get refunded the principal and curiosity–if any–on the invested funds upon request. For this reason the coverage makes good sense for everybody.
