There is a continuing surge in the value and volume of dormant accounts in banks which stakeholders have estimated to be over one trillion naira, and are calling on government to set up a trust fund that would manage the fund.
The stakeholders also demanded for an immediate review of the policy on dormant account in banks by the Central Bank of Nigeria (CBN) to really ascertain current value and means of managing it.
Some of the stakeholders who reacted to the recent report published by Vanguard over the ordeal and frustration faced by beneficiaries of deceased customers of banks, called for the establishment of a trust fund to manage dormant accounts that have stayed for over five years.
Vanguard’s investigation revealed that 90 per cent of the dormant accounts are with first generation banks in Nigeria.
Meanwhile, attempt at getting the actual value of dormant account in each of the 21 banks operating in the country proved abortive as most of them said, “It is only the CBN that can give the figures since they monitor the banks’ activities.”
According to sources within the banks, “we are not in a position to reveal the amount in our dormant accounts except we get directive from the CBN. The CBN ought to know the value because we submit our accounts to them and also they do monitor the banks.”
When Vanguard sought to get the total value of dormant accounts from the CBN, the apex bank’s Director, Corporate Communication Department, Mr. Ugochukwu Okoroafor, said, “We do not keep statistics on value of dormant accounts. Dormant accounts are part of banks’ deposits, so nothing stops them from lending out.”
But it would be recalled that the apex bank on March 7, 2011 instructed banks to do an audit of their dormant accounts. In a memo to all banks in the country, CBN mandated them to forward to it the list of all dormant accounts and the balances thereon.
A dormant account is one that has remained inactive from six months upwards. This means that the owner of the account may have either failed to pay in or withdrawn money from the affected account during the stipulated period.
Speaking exclusively with Vanguard on the issue, Mr. Boniface Okezie, Chairman, Progressive Shareholders Association of Nigeria (PSAN), blamed the CBN and other regulatory agencies in the financial sector for the loopholes and malpractices in the industry.
According to the PSAN chairman, “the managing directors of banks are feeding fat with the dormant accounts while beneficiaries of the dead ones are suffering and being frustrated to collect money left behind by their loves ones. I think government should look at this dormant account issue critically and established a trust fund that would be administered by credible Nigerians. If unclaimed dividend is over N50 billion then dormant account should be running over a trillion naira. If you consider people who have died since civil war you will agree with me that such money will be running over trillion of naira.
Continuing, he said, “There should be a review of the policy of dormant account. This is one of the things that the National Assembly should compel the CBN to do. The six months period that an account could be regarded as dormant should be reviewed. Besides, dormant account could be reclassified into two , that is, those who are still leaving and does not actively operate the account and those who are dead. By this we would be able to get accurate record of dormant account. I am sure that the CBN cannot give you the exact figure of dormant accounts in banks they supervise.”
In his own response, Mr. Taiwo Oderinde, National Coordinator, Proactive Shareholders Association of Nigeria (PROSAN), said, “It is sad that the regulators who are suppose to protect customers are not doing their work effectively. How can the regulators be there and beneficiaries of banks’ customers be suffering when they go to reclaim money left behind by their loves ones.”
Continuing, he said, “One of the reasons, why dormant account continues to grow is because many people have many accounts with different banks and may not actively operate all of them. Though, such people have access to get the money whenever they need it. Also, another major reason for the increase in dormant account is death. There are some people who had died and did not reveal information about their accounts with banks when they were alive to their close ones and some who had next of kin, but along the process of reclaiming the money from the banks are frustrated and the money are abandoned. So the CBN should find a way of monitoring the banks and the use of such funds. I think establishment of a special body to manage dormant account could be necessary, especially if credible and trusted people from the private sector are appointed to manage it.